How To Lower Your Property Taxes – Adventures In Assessor Land

FACT: The goal of local governments is to get every single penny in tax revenue from you! When I got my property tax bill in 2009, I was astonished to see that the City is taxing my primary residence based off an assessed value 7% HIGHER than in Armageddon 2008!  In the biggest economic downturn ever, the San Francisco assessors office believes my property actually increased?!  What a sham!

Like clock work, assessed values increase 2-3% higher every year, regardless of the economic environment.  It’s as if the City is punishing me for succeeding to lower my assessed value last year by 3%.  Too bad for the city, because they are messing with the WRONG person.  The tax collectors office counts on citizens to roll over and listen to their every whim, but not me, and certainly not you!

I want to share some tips on how you too can fight against the machine.

5 STEPS TO REDUCE YOUR PROPERTY TAX

 

1) Google “<Your City’s Name> assessor’s office.” San Francisco’s site is here. It’s important you proactively find out what the city/county is assessing your property first before you get your bill.  You need as much time to prepare for battle.

2) Go to their contact page and call and e-mail them every single day until you get a response. I’m not kidding here. They are sloooooow. Make sure all your v-mails and e-mails are polite, but stern saying you disagree with your assessment with proof.

3) After they respond, you must specifically ask how they came up with their ridiculous assessment value. Ask them to provide comps.  Also, ask them what you need to do to make your case. There will undoubtedly be appeal forms to fill out.  Fill them out and make copies for yourself (important as they like to tell people they never got it 2 months later, hoping you’ll give up and be too late!)

4) Like any good negotiator, you must highlight the lowest comps and negotiate accordingly. Let’s say your house is worth $1 million bucks. Go in with horrific comparables that look like bomb shelters in terrible locations, such as a house next to a firehouse that may be worth $500,000.  Your comparables need to be similar in dimensions and as close to your home as possible. Set your anchor low. The more comps you can provide, the better.  The assessor doesn’t usually have time to verify the comps physically, and just uses online comparisons.

5) After sending in the appeal forms and providing comps to your assessor, make sure you courteously follow up every month until you get confirmation of receipt. After reaching out this February, I failed to follow up with more comps until July (big mistake). By then, the assessor had moved to valuing a different district, and another person was recommended to me.  Good thing the new person had the forms, and  decided to e-mail and call me back. Otherwise, I would have wasted a lot of time.  Therefore, don’t forget to back up all your data!

*** This is exactly what lawyers do if you’ve ever got those “lower your property tax” letters in the mail. Don’t be lazy and just do it yourself.

KEEP ON FIGHTING UNTIL THE END FOR YOUR MONEY

Persistence pays off. These guys don’t have to do anything for you so it’s important you approach them in a polite, but stern manner.  The new assessor could have said it’s too late since I got my bill already, but he worked with me given my unwavering commitment to fight.  After several months of going back and forth, they lowered my assessed value back down to last year’s value, thereby saving me $1,504 ($94,000 X 1.16%).

Use this downturn to your advantage and fight like hell to lower your property taxes. If you’re not selling anyways, who cares if you convince the city to believe your property is worth 30 cents on the dollar? You should be rejoicing instead!  Don’t roll over and accept what the city bills you. Take action now!

Recommendations For Protecting Your Assets And Saving Money

* Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance! The average credit score for rejected mortgage borrowers has risen to 729 due to more stringent lending requirements. Do you know what your score is?

* Get the best home insurance possible. In order for your property to grow in value you must protect your property from damage. Fires, floods, leaks, theft, and other accidents happen all the time. If you have cut-rate insurance, you could very well pay way more than you should. I highly recommend checking with USInsurance.com online to find the best home insurance rates. They have a huge network of providers that will compete against each other to provide the most tailored home insurance coverage possible that is affordable. Mobile home insurance, renters insurance, condo insurance, and homeowners insurance are just a few of the options based on the type of home in which you reside. Leverage the internet to save money and protect your largest asset.

Updated: 4/25/2014

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Evan says

    @John,

    I agree with FS that it can be done yourself (easily actually), but I don’t think it is necessarily a bad thing to allow a professional to handle it if you know you know you can’t negotiate or handle tax situations without freaking out. Also, by me (Long Island) those attorneys that do it for you, usually take a percentage of your first year savings – so either way you are still winning, albeit, not as big of a win.

  2. LeanLifeCoach says

    You touched a sore nerve! We had our assessment go up 4% this year in a market that was down nearly 20%. What is really frustrating in our community is that the tax board is not even willing to listen to appeals outside of a January – April window! And then that is for the next year with no mechanism to appeal last years assessment! Arrggg!

    Thanks for the tips, I’m gearing up to fight now!

  3. admin says

    Lawyers generally charge 50%+ for the first year if successful (a big fat waste of money). Their tact is also quite spammy and impersonal, so the assessor will EASILY reject applications.

    I tried using them twice (free option), and both times they failed, so I did it myself. Now so can the entire property owning world with this post! :)

    Fight on citizens of America. This downturn has uncovered a great govt tax collecting racket.

    FS

  4. Millionaire Acts says

    In our case here in the Philippines, I think the key here in lowering property taxes is to have a lower assessment of the value of the property by the assessor. We have this called zoning in which sets of location have designated zones. That would also depend on the type of land of your property – whether commercial, residential, or agricultural.

    By the way, I’d like to congratulate you for your fast alexa ranking increase! In just a matter of weeks, you’ve already achieved such high alexa rank! Kudos to you FS! :)

  5. Neal @ WealthPilgrim.com says

    Great advice. I submitted my form but didn’t follow up…DOOOH……

    I figured they would do their job – what was I thinking?

    I’ll get on it today. Thx FS

  6. admin says

    Neal – Trust me when I tell you they WILL NOT be pra-active in following up with you to save you money! Their goal is to hope you never follow up and to “take it and like it”.

    Them following up means money out their coffers. Fight on and never surrender!

    Ps. What happened to your gravatar?
    FS

  7. admin says

    @LeanLifeCoach Ahhh, the dreaded Jan-April WINDOW where hardly anything sells, especially this past Jan-April! The assessor told me the SAME THING, and I gave it to him straight and asked him to BE HONEST with me.

    The negotiation phase is really where being courteous and polite really counts. The assesor knows the economy is bad, and the window is tight for comps, so he let me use others based in June/July.

    Don’t go down without a fight! You know, and the assesor knows it is preposterous to raise assessed values in the past 12 months, you just have to pull on his conscious.

    Fight on. FS

  8. Charlie says

    nice work on lowering your assessment! These days the government is out for every penny they can get, esp. in debt overloaded states. Glad your persistence paid off! Down with taxes!

  9. MeagerMoney says

    My property taxes hadn’t change from last year, but I know the price of the housing in the area has. Since my taxes didn’t go up from last year, I didn’t fight it – I guess I should have stating that housing has decline and so should have my tax bill? Wonder if that would have worked.

    There is always next year though! :)

    • admin says

      Hi MeagerMoney – You should absolutely ask to get your property taxes reduced if your comps have declined in value. The government is counting on you to do nothing and make more money off you than they otherwise should. It just depends on how much you think it’s worth it. I would say anything greater than a $500/yr savings for me is worth it. Now you know from this post that it’s just a simple click of many buttons to get it lowered! Sam

  10. Charles says

    Very nice! My coworker is going through a very similar headache right now. He’s been fighting the City of Baltimore for several years now after taxing him crazy year after year.

  11. Roger says

    Good advice. I’ll have to keep that in mind for when I become a homeowner (and share it with my friends and relatives who already are). Given the lousy housing market over the past few years, the idea that anyone’s home has increased in value is practically laughable (if it weren’t costing people so much money). As with almost everything in life, it’ll likely be negotiable if you just ask, preferably repeatedly and frequently.
    .-= Roger´s last blog ..Net Worth Update: Post-Thanksgiving Coma =-.

    • admin says

      Rog – You’re right, every really is negotiable. When you do buy your property, here’s hoping you won’t have to even bother trying to lower your prop tax, b/c it’s just increasing in value!

  12. Robin says

    Having worked as a mortgage underwriter and also as a mortgage broker, here are some things your should do before you send in your request letter to the local assessor’s office.

    1. Know your current property value. Hire an appraiser or realtor to provide you with comps of recently sold properties that are similar (sq footage, bed and bath count, etc) to your property within the neighborhood. Comps should be of recent sales only (within last 3-6 month), and should be near your property within a 1 mile radius. Provide 3 or more comps that meets these criteria for the purpose of establishing a downtrend in sales prices and property value.

    2. You should include these comps when you contact the assessors office to support your case for lower taxes. Make sure you send in the original comps and not a photocopy. If you have an actual appraisal done make sure u send in the one with color pictures of all the comps.

    I helped several of my past clients get re-assessed to a lower value, the most importunate thing is to provide GOOD comps. Make sure you hire a realtor or appraiser that knows what they are doing.

  13. Cy Abdel says

    Sam,

    I want to thank you for the information and putting up a fight to have your property taxes lowered. The city raises property every year without any real justification….it just doesn’t make sense. Thanks again….

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