Property Tax Appeal

What Are The Prerequisites To File A Property Tax Appeal In The US

A property owner in the US needs to file a property tax appeal if he/she thinks that his/her property tax has been incorrectly assessed by the local authorities. The property tax levied depends directly on the assessed value of the property. Therefore, before filing an appeal, the property owner must be able to first prove that the property value itself has been incorrectly assessed. Otherwise, the municipality assessed value of the property is assumed as correct as per law.

The property owner needs to arrange to first get an independent property value assessment made in such a case. It is important to note that the municipality assessed value of any such property cannot be greater than that evaluated using the two market value standards in use in the US today.

These are known as the true (fair) market value standard and the common level range standard. The true market value standard requires that the municipality assessed property value should in no case be more than the true market value of the property as assessed on a state specific date of the previous year. The previous year is also known as the pretax year. The true market value standard also requires that all the evidence that is used in a property tax appeal should precede the above state specific assessment date.

The other standard, the common level range, considers the effect on the independently assessed property value due to certain external factors that have a bearing on it. The factors include depreciation, appreciation, recession, and inflation. Any of these can cause the independently assessed property value to vary. Moreover, physical deterioration of property may itself cause a change in its value.

The independently assessed property value needs to be adjusted for the variations caused because of all the above factors. Otherwise, it would cause a deviation to the true market value standard.

The above two standards in a combined form are binding on not only every appellant, but also on every municipality in the US. This is as far as the assessment of all property values made by the latter in the case of all property owners.

However, in the case of all property tax appeals, the burden of supply of proof of excessive or discriminatory property value assessment is always on the appellants. It is incumbent on them to provide (to the property tax appeal board of the particular US state) the market value of the property on the state specific date of the pretax year (as independently assessed using the above two standards).

They need to have also paid in full all the municipal charges and taxes up to and including that applicable till the first quarter of the tax year. Moreover, they need to provide credible documentary evidence in support of their argument that the municipality assessed property value is in error.

All of the above is required to be entirely adhered to before a property owner files a property tax appeal. Special rules are however, applicable for a commercial property tax appeal.