Appeal Your Property Taxes

Homeowners who believe their property values have been overassessed can benefit by appealing their tax bills. Gerald Schippers of Stockton, Calif., has saved nearly $2,300 a year by taking this step. Three years ago, the retired airline mechanic appealed the $410,000 assessment on his San Joaquin County home, and he's since done so annually. Schippers has gotten his property's assessed value—the basis on which taxes are paid—down to $180,000. "People can do it," he says, if they're willing to do the necessary research and meet the required deadlines.

According to the National Taxpayers Union, up to 60 percent of U.S. homes are overassessed, leading to higher tax bills. Yet, "appeal rates are quite low," roughly 5 percent of home­owners, says Pete Sepp, executive vice president of the advocacy group. With housing prices dropping in many communities—and down by about half in some major metro areas—many local governments have not adjusted their property tax values accordingly.

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While San Joaquin and other local governments assess property annually, most do so only once every three to five years, says Sepp. That means many homes still have assessments based on peak market years. In 2009, Keith Newcomb, a financial planner in Nashville, appealed his property's assessed value, which was 22 percent higher than the previous assessment in 2005, during the market's heyday. "The assessment didn't reflect the actual value we could sell the home for," says Newcomb, who lives in a 1957 ranch house. He checked Zillow.com, an online real estate marketplace, and his county's websites for tax assessments and the register of deeds. Collectively, these sites gave him a sense of area property values, including comparable homes that had recently been sold in his neighborhood. This information helped him cut his assessment by 8 percent.

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Even if your house is assessed annually and reflects the down market, it can still pay to appeal if you spot errors. "My house seemed to add a bathroom miraculously," Newcomb says. Experts say to look for discrepancies in the tax assessor's math and document comparable properties whose assessed value is less. Newcomb advises owners to look up recent sales online, specifically homes of similar size and characteristics, like the number of bedrooms and baths. If these consistently produce a lower value than your new assessment, you'll be in a good position to make an appeal.