Appealing for lowering your property taxes: the smart guy's guide

Ever since the State stopped assuming that your only house is your primary residence, property tax bills shot up for everyone. Yes, if you have not declared the fact that your only residence is your primary residence ready yourself to cough up more in property taxes. The simple solution is to send in the Homestead Tax Credit Application or file an appeal.

This is turning up to be a new wave for tax assessors across the country to tackle. The figures are a deep matter of concern for the State itself. In other states in the country for example, The Wall Street Journal reported that in St. Tammany Parish, La., 15,000 residents — instead of the usual 500 — requested a review of their 2008 tax bills. Similarly the Cleveland Plain Dealer reported that Cuyahoga County, which sees approximately 1,300 foreclosures a month, faced three times as many appeals in 2007 compared with previous tax cycles.

On the other hand, while prices of residential properties dipped to 27% from the 2006 peak to the end of 2008, according to the S&P/Case-Shiller Index, while the amount municipalities collected in property taxes climbed to 12% from 2006 to 2008. These figures are a clear indication why more and more people are opting for re-assessment of their property taxes.

Of late, due to the dip in sales prices, the assessments on houses are higher for the sales price than they used to be earlier. The point here is that you possess the right to contest that your property needs to be re-assessed so that you eventually end up paying lesser taxes. For people who haven't bought a property recently but have been staying in the same property since sometime now, the taxes soared with the incline of property rates too.

Your options:

• Property owners can file through the Homestead Application requesting lowered property taxes.

• Appealing is a bit more complex process when compared to filing a homestead application. A board or panel needs to be convinced about your plight in a very convincing manner. Considering the fact that these boards see a hundred such cases a day make sure you sound genuine and fact-equipped while appealing before them. It is a good thought to survey a few properties around your own and review the sales figures. Bear in mind that these houses might be located differently, may have a different number of rooms and might have been recently renovated before assessing your own house in context to them.

Smart Steps

• Gather information on who will be hearing your appeal. You can appeal your assessment any year. Even if you have already paid the taxes, do not worry they will refund it if your appeal goes through.

• Most municipalities allow a personal hearing. Make it a point to be there on time and draw some factual information about the properties around your own.

• If you are required to hire a tax attorney, try negotiating with the attorney for a lump sum fee rather than per hearing based structure. Many attorneys demand for a portion of your first years' tax savings. This we know is a good proposition since it will start paying up the second year itself due to the lowered property tax bills.

The State reviews hundreds or probably thousands of such applications on a regular basis and you need to hit bulls-eye when your case comes up. Seek advice from neighbors or friends in your area who have beaten the same path for small tips to improve your proposition. Once done, happy tax savings are just at arms length.