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Why real property owners may need to file a tax appeal

On Behalf of | Oct 30, 2024 | Taxation

Owning real property means committing to specific ongoing investments. Property owners have to maintain the land and edifices they own. They have to annually renew their insurance policies. They also have to pay property taxes to local authorities.

Particularly when property values increase, taxes can start to rise, which can be a source of concern. Those who own multiple properties and those living on a fixed income may struggle to account for sudden increases in their property valuations. In some cases, property owners may need to initiate a tax appeal to keep their taxes reasonable and appropriate.

What is the purpose of the tax appeal?

A tax appeal involves requesting a formal review of the valuation of a particular parcel. In some cases, the state authorities assessing properties do not inspect them but simply apply a formula to account for increased local property values and inflation to the prior assessment. Property owners may sometimes have sticker shock when they realize what the state believes their home or other real estate holdings may be worth.

For some property owners, a more in-depth and customized review of the property’s condition and other pertinent factors could result in a more realistic valuation. A tax appeal allows a property owner to request a thorough analysis of the property to determine if the assessed value accurately reflects market and property conditions.

Why do homeowners appeal?

For some, a property tax appeal is necessary because their budget cannot account for a sudden, unexpected increase in assessed value. For others, there may be clear evidence of an inaccurate assessment.

Maybe the property has numerous interior defects that drastically undercut its actual fair market value. Perhaps there are issues with chemical contamination in the soil that make it useless for agricultural purposes. In any scenario where real property owners strongly believe that the assessed value does not reflect the actual condition of a property, initiating a tax appeal could be a wise choice.

Learning more about the rights of real property owners when facing questionable property valuations can help people protect themselves and one of their biggest investments. Those who have support when requesting a tax appeal can increase their chances of a favorable outcome and diminish the risk of making mistakes with paperwork.