The Property Tax Appeal Process Explained

6 steps to appealing your property tax bill.

View of several homes for a property tax appeal
Image: Davel5957/Getty

It’s possible to lower your property tax through property tax appeals — challenging the value the tax assessor assigned to your home. That “assessed value” is used to calculate how much tax you owe.

One way to lower your property tax is to show that your home is worth less than its assessed value. You can do the initial research online or by making a quick call to your real estate agent.

Get Background on Local and State Property Tax

Assessment practices vary widely across the country. For example, some states, like Texas, don’t levy state property taxes; only their local government entities do (and sometimes more than one local government entity). Plus, the appeals processes can vary depending on whether the local area or state generated the tax. So, you’ll want to know the source of the tax you’re questioning. .

Also, you'll want to factor in whether your home generates any rental income. If so, your home would be taxed at a higher rate. 

It’s important to stay up to date on government legislative proposals because tax changes are frequent, and assessment practices can change with little notice. For example, pay attention to how often property is assessed. 

Like assessment practices, the appeals process can vary. Here's how to appeal your property tax bill based on steps commonly followed.  

Steps in the Appeals Process

Step 1: Read Your Assessment Letter

 Local governments periodically assess all the real estate they tax. When your new assessment comes in the mail, it’ll list information about your property, such as lot size or a legal description, as well as the assessed value of your house and land.

Your property tax bill will usually be calculated by multiplying your home’s assessed value by the local tax rate, which can vary from town to town.

If you think your home’s assessment is higher than it should be, challenge it immediately. You generally have fewer than 30 days to do so, though each taxing authority sets its own timeline. The back of the letter often outlines the procedures.

Step 2: Decide If a Property Tax Appeal Is Worth Your Time

How much effort you decide to put into a challenge depends on the stakes. Single-family home owners in the U.S. paid state and local governments an average property tax of $3,719 in 2020, according to ATTOM Data Solutions, curator of a nationwide database. That was a 4.4% increase from 2019. The effective tax rate (property taxes paid as a percentage of owner-occupied housing value) was 1.1% in 2020.

Collections vary widely from state to state. In New Jersey, for example, where property tax rates average 2.21% of a home's value, potential savings are greater. Ditto for communities with home prices well above the U.S. median, which was $346,900 in 2021.

Step 3: Check the Data

Make sure the information about your home is correct. Is the number of bathrooms accurate? Number of fireplaces? How about the size of the lot? There’s a big difference between 0.3 acres and 3.0 acres. If any facts are wrong, you may have a quick and easy challenge on your hands.

Step 4: Get the Comps

Ask a real estate agent to find three to five comparable properties — or comps in real estate jargon — that have sold recently. Alternatively, check a website like realtor.com® to find approximate values of comparable properties that are very similar to yours in size, style, condition, and location. If you’re willing to shell out $375 to $450, you can hire an appraiser to give you a professional opinion of your home’s value.

Once you identify comps, check the assessments on those properties. Most local governments maintain public databases. If yours doesn’t, seek help from a real estate agent or ask neighbors to share tax information. If the assessments on your comps are lower, you can argue yours is too high.

Even if the assessments are similar, if you can show that the comparable properties are superior to yours, you may have a case for relief based on equity. This situation could happen, for example, if your neighbor built an addition while you were still struggling to clean up storm damage. In that case, the properties would no longer be comparable.

Step 5: Present Your Case

 Armed with your research, call your local assessor’s office. Most assessors are willing to discuss your assessment informally by phone. If not, or if the explanation doesn't satisfy you, you can request a formal review.

Pay attention to deadlines and procedures. There's probably a form to fill out and specific instructions for supporting evidence. The length of the review process depends on your municipality, but a final decision might take a few months — or sometimes longer. Expect to receive a decision in writing.

Step 6: Appeal If You Don't Like the Review

 If the review is unsuccessful, you can usually appeal the decision to an independent board, with or without a lawyer’s help. You may have to pay a modest filing fee. If you end up before an appeals board, your challenge could stretch as long as a year, especially in large jurisdictions that have a lot of appeals. 

As you weigh an appeal, keep these factors in mind:

  • The appeals board can lower only your real estate assessment, not your tax rate.
  • Your assessment could be raised, even though the chance is slight. As a result, your property tax would increase.
  • A reduction in your assessment right before you put your house on the market could hurt the sale price.

An easier route to savings might be to determine if you qualify for a property tax exemption based on age, disability, military service, or other factors.

Related: Find Out What's Deductible for Homeowners

This article provides general information about tax laws and consequences and shouldn’t be relied on as tax or legal advice applicable to particular transactions or circumstances. Consult a tax pro for such advice.

Barbara Eisner Bayer

Barbara Eisner Bayer

Barbara Eisner Bayer has written about finance for Motley Fool, Daily Plan-It, and Nurse Village, and is the former Managing Editor of Mortgageloan.com and Credit-land.com. She splits time between a beachfront condo and a mountain retreat. Follow Barbara on Googe+.