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Property Tax Appeals: When, How, & Why To Submit (Plus A Sample Letter)

Posted by Lisa English on Oct 20, 2020 8:00:00 AM

Taxes are still one of the certainties in life (it’s nice to know some things haven’t changed since the 18th century), but the same can’t be said for the amount of taxes paid. Thanks to the property tax appeal process, valuation amounts are never set in stone—as long as you take full advantage of your right to challenge an unfair assessment.

A Sample Property Tax Appeal Letter & Tips For Successful Filing

The appeal process kicks off with a simple property tax assessment appeal letter. Below is what you need to know about why you might need an appeal, completing and submitting these letters, how to ensure you don’t make the mistake of missing important appeal deadlines, and a sample property tax appeal letter you can use as a reference.

7 Reasons To Submit a Property Tax Appeal Letter

It all starts when you open a valuation notice from the assessor and see a property valuation amount that you believe is too high. Here you have two options: 1) You can pay the too-high tax bill because you think you don’t have time to stage an appeal. (For a simple way to overcome that challenge, keep reading.) 2) You can appeal the valuation and possibly lower your tax bill.

But what are some underlying reasons for that high valuation? To help answer this question, you can request an itemized list of property—called work papers—the assessor used to determine your valuation. You may find that the assessor’s valuation is fair and no appeal is necessary. However, you may find mistakes or disagree with some of the criteria the assessor used to determine your valuation. In the latter case, the following are a few scenarios you may identify during your review of the list.

1. Your valuation includes business personal property you no longer own.

Within the last year, you may have:

  • Sold assets
  • Discarded assets
  • Moved assets to a different location

Notably, you still own the assets you moved, but they should not be included in the valuation for their original locale; instead, the moved assets should be assessed as part of the other location’s valuation.

How do the actions above impact your valuation? Consider this example: A few months prior to your valuation, 10 employees broke their laptops. So you bought 10 new laptops to replace the old ones. In your valuation, the assessor noted your purchase of the new laptops, but also included the discarded laptops. Thus, your valuation would be higher as you are being assessed for property you no longer own.

2. Your valuation includes assets or real property owned by someone else.

You shouldn’t be on the line for personal property you possess but don’t own. Leasing is a prime example. Assume you have a large copy machine you’ve leased for the office—the copier is in your possession, but it’s owned by the company you leased it from. That leasing company is likely responsible for paying taxes on the copier, not you.

Similarly, for real property, the assessor’s records may not be updated to reflect a change in ownership of a location. It may show you’re still the owner of record and, therefore, still responsible for the taxes. A property tax assessment appeal letter can help bring this issue to the assessor’s attention.

3. The assessor valued the same property twice.

Called a double assessment, the assessor may have valued the same real or personal property twice—meaning you could be on the line for twice the correct amount. This costly issue sometimes occurs due to a clerical error in the taxpayer name or address. For example, you may be sent a valuation notice under the names John W. Smith and Johnny Smith, or for 1523 W. Main and 1523 West Main.

4. The assessor under-depreciated your assets.

The more depreciated an item is, the less value it has—and the less you owe come tax time. However, there is room for interpretation, which can lead to some of your personal property being less depreciated than you would want. This may be due to the assessor not having a clear understanding of your assets.

For example, on your tax return, you may have used an ambiguous term to describe your property—e.g., “cash register.” The assessor didn’t know whether the item was a classic register you might find in a small diner or a high-tech point-of-sale system modern bars use. The former version would retain its value from year to year because of its age, while the latter version would likely depreciate heavily from year to year. Assuming the assessor valued it as a classic register—when you actually had a modern register—you would owe more taxes on that asset.

5. The property details on the property record are inaccurate.

Inaccurate property details can lead to an inflated valuation. Here are a few property details that tend to be wrong:

  • Building square footage
  • Land acreage
  • Construction year
  • Building features (such as a walk-in freezer or covered patio)

6. Your real property valuation is not in line with similar properties in the same jurisdiction.

Sometimes it’s not that an asset has a particularly high absolute value, but that the valuation is high compared to similar properties near you. For example, if you own an Italian restaurant that’s valued 50% higher than another, similarly sized Italian restaurant located a mile away, there could be cause for a property tax appeal.

7. The value of your real property increased more than is reasonable (or legal) compared to the previous year.

If your real property increased, say, 4% over last year, you may find this unreasonable (or unlawful), depending on the state your property is located in. For example, California law mandates that real property values not increase more than 2% per year, unless there is a change in ownership. In this case, a property tax appeal letter would certainly be warranted.

Property Tax Appeal Letters: How & When To Submit

If you decide to appeal the valuation, the first step in the property tax appeal process is to simply notify the assessing jurisdiction of your intentions. In most states, an appeal notification consists of a letter stating your intentions (see a sample property tax appeal letter below). Keep it simple:

  • Include phrasing that indicates the letter is a “formal notice of protest.”
  • List the account number or numbers you plan to protest.
  • State the reason(s) for protesting. Common reasons for protests are that a property has been assessed more than once (called a double-assessment), an assessed location has been recently closed, or the stated value is too high.
  • Sign it and send it.

Not all states accept letters—some, including Georgia, Texas, and California, instead require completion of an official notification form.

Sample property tax appeal letter

This sample property tax appeal letter includes the key components: “formal notice of protest” phrasing, account numbers, reason for appeal, and the organization’s name and whether the property referred to is real estate or personal property.

Sample appeal notification form

This sample appeal notification form from Georgia is fairly representative of forms from other states with a similar requirement, though the information requested will vary slightly from state to state.

When do you send the property tax appeal letter?

Typically, property owners have 30-45 days from the time they receive their valuation notice to send a property tax appeal letter. That’s a relatively small window—which means you won’t have time to confirm your belief that the assessed value is too high before notifying the jurisdiction you intend to appeal. So if you do feel you’ve been assessed unfairly, send the letter to buy the time you need to research the matter properly. If it so happens that you discover the stated value is correct, you can always withdraw your appeal.

Are you using the right technology to help your tax team work smarter? These tools can give your team a competitive advantage.

Important: In just about every jurisdiction, the time frame for appeal notification holds true even if you never actually received the assessment notice. So if you don’t get the valuation and then miss the appeal deadline, there’s nothing you can do. That’s why it’s so important to stay on top of appeal deadlines. (This chart includes appeal deadlines by state.) If the date is approaching and you still haven’t received your assessment notice, call the jurisdiction to inform them and to request your value information. Then you’ll know whether to proceed with a property tax appeal or not.

What happens after sending the letter?

After you send the letter, you’ll usually get a response back to confirm it was received. Sometimes the communication you get will assign you a case number or appeal number; other times it may even include a scheduled date and time for a hearing. The amount of time you’ll get to put your case together varies by state. Some states, like California, have so many hearings that your own date could be as far out as a year. For other states it could be as little as 30-45 days.

Can you successfully navigate your property tax appeals process?

The property tax appeal letter is just one piece of the process; you also need to meet important deadlines and do thorough research to support your case, which takes time. TotalPropertyTax (TPT) software has you covered on both those fronts.

TPT keeps you informed and prepared by managing the important dates associated with all stages of the property tax cycle. It also generates property tax assessment appeal letters and can help you quickly create appeal packages, including the appeal letter and any custom attachments you want to send. As you prepare your appeal, you can also use TPT to capture market, assessed, and taxable values across multiple notices, as well as easily compare values across notices and prior years for analysis.

TPT can also give you back the time you need to prepare a successful appeal. It handles many of the manual burdens associated with the tax cycle, like data entry and information verification. As a result, TPT users have more time to devote to building successful appeals cases and other high-value tasks.

Interested in seeing how TPT works? Schedule a demo today.

Download Now: The State Of Property Tax Technology: 2018-2020

Topics: Property tax appeals