Author Topic: Appealing Property Tax Assessment  (Read 966 times)

Lucky Recardito

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Appealing Property Tax Assessment
« on: May 17, 2018, 08:01:04 AM »
If this has already been discussed ad infinitum, please feel free to point me to relevant threads!

I'm looking for some wisdom on appealing our property tax assessment. We just got our triennial assessment update, and our home (a 2-unit building) is on the hook for a BIG increase. It's not unfair for our assessment to go up (we have certainly been somewhat under-assessed for the past couple of years, from what I can tell), but I would of course like to mitigate the financial hit to the extent that we can do so fairly and honestly.

The assessment letter says we have until June 7 to appeal; we've been barraged with solicitations from law offices looking for our business in running an appeal for us. (Something is in our mailbox literally every day.)

Is appeal something I should be doing? (I've heard "appeal every chance you get" but have never been in this position -- I previously owned a condo where my property taxes were so low that it never registered for me... I do know that our condo board hired someone to appeal for the whole building, and we did receive a decrease.)

And is appeal a DIY project, or should I pick one of the solicitations and respond to it? If the latter, any recommendations for how to sniff out the best one? The cost for hiring someone to do the appeal seems to be 30-50% of savings (but solicitations differ in the amount of info they provide here; it's often unclear whether they will charge based on one-year or multi-year savings).

We're in Cook County, IL.

waltworks

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Re: Appealing Property Tax Assessment
« Reply #1 on: May 17, 2018, 09:12:35 PM »
The standard process is that you present comparables and/or throw your own home under the bus somehow to back up the claim that it's worth less than the assessor says. You don't need a lawyer for this, they're just going to go grab some comps and do the same basic thing that you can do in an hour or two.

In general you have a 1 in 3 chance of succeeding (around here in UT), though it depends a lot on where you live and what's going on with your local market. So if this is $500+, it might be worth your expected-utility time to appeal. If it's a few hundred bucks, forget it.

-W


Car Jack

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Re: Appealing Property Tax Assessment
« Reply #2 on: May 21, 2018, 09:12:43 AM »
Waltworks is correct.  We have successfully appealed and had our assessment reduced.  We found recent, local comps and had to add or subtract value for differences.  Lot size, # bathrooms, newer, older.  I believe we had about 10 comps.  We had to show that we were overvalued when our property value with adjustments was consistently higher than all the comps we presented.

Contrary to popular belief, assessments are not directly related to your property value.  They put your property in perspective with all other properties in the town.  We didn't use a lawyer and honestly, I can't even think of what a lawyer could add to what I did.

YttriumNitrate

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Re: Appealing Property Tax Assessment
« Reply #3 on: May 21, 2018, 11:45:18 AM »
http://www.chicagotribune.com/news/opinion/zorn/ct-property-tax-appeals-appalling-zorn-perspec-0618-md-20170617-column.html

Just across the border in Indiana, I'm now into the third stage of a property tax appeal (just before it goes to court). The first two stages were pretty informal, but now I'm getting to the stage where it probably would be worthwhile to consult an attorney (e.g., finding case law and dealing with the rules of evidence).

The easiest way to appeal an assessment is to just take a look at the property record card (from assessor's website) and point out something that is wrong.

bacchi

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Re: Appealing Property Tax Assessment
« Reply #4 on: May 21, 2018, 01:21:15 PM »
It depends on the municipality whether it's worth it to hire someone.

I appealed and got reductions several times before it just...stopped working. The tax appraiser didn't care about delayed repairs, comps, kitchens in need of updating, etc.

My local tax appraisers also have wide discretion and petty tyrant powers. If you anger them, they can add 1000 square feet to your house because they "feel like" that you renovated without a permit. If it gets escalated, you're then paying a lawyer for billable hours for the appeal. Best to just pay the 20% one-time fee on taxes saved.

If you're not in a property tax dependent city, you may as well try it yourself to see how it goes. Bring comps and pictures and be on your best behavior.
« Last Edit: May 21, 2018, 01:22:54 PM by bacchi »

cooking

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Re: Appealing Property Tax Assessment
« Reply #5 on: May 21, 2018, 03:46:52 PM »
I know a little about property tax appeals in NJ, but it sounds like things are different where you are, so no sense my giving you advice.

One thing I did notice was you said it's a 2 family.  Is it in your name or the name of an entity?  Some hard-nosed places won't allow you to take the appeal yourself if it's in the name of an entity rather than your own name.  (Lawyers have pushed this issue in some jurisdictions as practicing law w/o a license).  Just as some places like NJ won't allow you to file an eviction if the unit is owned by an entity.  Or maybe we just have too many lawyers in NJ.

Lucky Recardito

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Re: Appealing Property Tax Assessment
« Reply #6 on: May 21, 2018, 03:47:11 PM »
Useful perspectives -- thanks, all.

Since I posted this question, I've been chatting with some local coworkers/friends and have found many people who have successfully appealed their assessments... but ONLY with a legal firm. I was surprised, so I reached out to the Realtor we'd most recently worked with (since he owns several properties in the city and has always struck me as pretty knowledgeable) -- his take was that the process is stacked in Cook County (Chicago + surrounds) such that going with a legal firm is necessary.

I'm interested in the stats in the Trib article you posted, YttriumNitrate, because the success rates for DIY vs w/ a firm appear to be so similar... which IS what I naturally expected, but IS NOT what I've now heard anecdotally. (Though I'm totally willing to accept that my sample may be very biased.)

We're talking about a big potential hike -- nearly doubling my assessed property value, for a tax impact of thousands of dollars a year. Since this is SUCH a big jump, and since it's a triennial assessment that will stick with me for a while, I'm becoming inclined to go with a legal firm this time, and try to DIY it in the future when the stakes are a little lower. (Plenty of firms vying for my business, with $0 at risk if no reduction is attained; fees for success range from 30-50% of one year's tax savings. So not small, but the assessment is set for 3 years so the savings or lack of savings in years 2 and 3 continue...)

OY.

Lucky Recardito

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Re: Appealing Property Tax Assessment
« Reply #7 on: May 21, 2018, 03:48:04 PM »
I know a little about property tax appeals in NJ, but it sounds like things are different where you are, so no sense my giving you advice.

One thing I did notice was you said it's a 2 family.  Is it in your name or the name of an entity?  Some hard-nosed places won't allow you to take the appeal yourself if it's in the name of an entity rather than your own name.  (Lawyers have pushed this issue in some jurisdictions as practicing law w/o a license).  Just as some places like NJ won't allow you to file an eviction if the unit is owned by an entity.  Or maybe we just have too many lawyers in NJ.

It's in my name, so that keeps it relatively simple!

smoghat

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Re: Appealing Property Tax Assessment
« Reply #8 on: May 24, 2018, 10:57:51 AM »
Ok, I managed an apartment building in Chicago for two decades, it's how I built my stache. 

It's a total scam. But you have to play the game.

You get the bill, your taxes double. No worries, everyone's just did.

You need to find a lawyer (PM me) if you don't have one. You will need to prepare various documents as to why boo hoo you.

Your lawyer will appeal for you, and may even need to file a second appeal.

Your taxes will be knocked down from double to where they were before. Maybe a little higher, maybe even (!!) a little lower. It's all luck.

You will have to pay 1/3 of the amount that they have saved you during the first year (only).   

It's all a scam to make the lawyers money, which makes me think you'd be insane to DIY it ****unless you know other people who have successfully done the same**** because it's not playing by the (corrupt) rules. Please don't debate right or wrong with me. I think it is WRONG!

My father did it for 30 years before me. It's what it is.   
« Last Edit: May 24, 2018, 11:00:39 AM by smoghat »

Lucky Recardito

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Re: Appealing Property Tax Assessment
« Reply #9 on: June 01, 2018, 12:41:38 PM »
Thanks for the Chicago-specific perspective, smoghat. You've pretty much echoed what our Realtor (also a Chicago property-owner) told me, which is helpful in confirming/balancing what I'm hearing from various sources. We've gone ahead and appealed via a firm our Realtor recommended. Crossing my fingers for a good outcome, but also shrugging my shoulders -- the biggest thing I think that I've learned so far is that the process just sort of is what it is, and it's not worth losing too much sleep over it.

If I'm going to lose sleep over something, it should probably be the relative over-assessment/over-taxation in poorer neighborhoods where appeal is uncommon... oy.

Michael in ABQ

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Re: Appealing Property Tax Assessment
« Reply #10 on: June 09, 2018, 09:10:55 PM »
There were several high-profile investigative reports recently about Chicago property taxes and how unfair they were (ProPublica maybe?). County assessors are supposed to use mass appraisal techniques that make it so similar properties in an area should all have about the same assessed value. That should be checked regularly against actual sales. Bottom line was Cook County has just sort of done whatever they want over the years and there is definitely an element of corruption/collusion with the tax appeal firms. This is especially the case with commercial properties where a successful tax appeal can be worth tens or hundreds of thousands of dollars which can translate into an increase in the market value of that property by a million dollars or more.