Lower Home Values Aren’t Translating Into Lower Property Taxes

Property tax bills were never tied precisely to the market. Because they are usually calculated as a portion of the home’s value, and allowed to rise at only a certain percentage per year, many homeowners’ property values still have not caught up to their home’s value of several years ago — which may, despite recent drops, still be higher than the current value.

But as Alyssa Abkowitz reveals in the February issue of SmartMoney magazine, there’s a new reason that you aren’t likely to see your property tax bill go down this year — even if you take the time to file an appeal. (See “Reassessing Property Taxes.”) County tax assessors are apparently looking for ways to keep the assessments (and therefore tax revenues) high. They are taking advantage of the very slowness of the market and lack of sales to say, in effect, “Gee, we don’t see any recent comparables that show your house has dropped in value.”

What’s more, says Abkowitz, homeowners are complaining that tax assessors’ offices are making the appeal process difficult to navigate, for example by forcing homeowners to file online appeals with fill-in-the-box spaces that don’t allow for a full explanation of your argument.

This article struck a chord with me. I had considered filing an appeal to my own property tax assessment this year, having observed home prices dropping and homes sitting unsold all around my neighborhood. But after spending hours poring over the actual comparable sales, I sadly concluded that I didn’t have anything close to a slam-dunk argument for reducing my bill. Maybe next year?