When property taxes rise by a significant amount, homeowners have recourse to appeal, and many do. But as we enter 2022, experts say those appeals are unlikely to be as successful as they have been in the past. Whether they live in states with the lowest property taxes or the highest."
As Motley Fool publication The Ascent explained, in order to be successful in a property tax appeal, the homeowners must find a way to prove the value of their home has been over-assessed. But with home prices rising so rapidly at present, doing so is likely to be much more difficult.
Property taxes in the U.S. are calculated based on the home’s assessed value. That is the amount a local assessor thinks it could sell for. That value is then multiplied by the area’s local tax rate to calculate the amount of property tax that needs to be paid.
Unfortunately for those who think their homes have been valued too highly, appealing against that assessment could prove to be more difficult next year. Home prices have risen extremely quickly across much of the U.S., with most areas showing double-digit value increases for existing homes compared to one year ago. According to the National Association of Realtors, existing home prices nationwide were up 13.9% in November compared to a year earlier.
That’s not to say homeowners won’t have any chance in an appeal. Should they feel their homes’ assessed value has risen by too much, they can file an appeal and show comparable sales in their area at lower price points. Generally, the more recent those comparable sales are, the better.
Experts say the amount property taxes will rise is likely to vary across the U.S. That’s because changes to a home’s assessed value are completed at different times in different states. Some local assessors reevaluate each home every year, while others may only do so once every five years.
“It depends on where you live as to when those changes in property values that we are seeing take place,” said Marc Pfeiffer, senior policy fellow and assistant director at the Bloustein Local Government Research Center at Rutgers University in New Brunswick, N.J, to Barrons.com.