Common property tax errors
Property tax is based on a value set by a public office, not on a number you negotiated. That makes errors easy to miss. Most owners pay the bill without checking the data behind it. This article covers where errors tend to sit and what to gather before you question one. Rules, forms and deadlines vary by jurisdiction. [VERIFY: appeal deadlines and procedures for each county or taxing district]
Errors in the property record
The assessor keeps a record for each property. A law firm's guidance on property description errors lists the usual faults:
- Out-of-date information
- Wrong square footage
- Improvements listed that do not exist, or real improvements that are missing
- An incorrect property classification
- A wrong description of condition
Owners of commercial property may not receive a description with the notice. In that case, you request the record from the assessor's office, where it is often available online.
Values that do not match the market
An assessed value can exceed what the property would sell for. This is more likely after a purchase price, an appraisal or a drop in rents or occupancy that the assessor has not reflected. A county page on assessment appeals lists related grounds: the value is above market value, similar nearby properties are assessed lower, or the data used is wrong.
Missed windows
An appeal concerns the assessed value for a given year. Once the tax bill arrives, it is usually too late to dispute that year's assessment, although you must keep paying while an appeal is pending in some places. The same county page notes both points. Missing the window is the most expensive error because it cannot be fixed afterward. Put the deadline in a shared calendar when notices go out. [VERIFY: whether payment must continue during an appeal]
Exemptions and classifications that lapse
Some properties qualify for reduced treatment because of their use or owner. If an application is not renewed, or a use changes and nobody tells the office, the benefit can end without notice. Keep a list of every exemption or special classification you hold, with its renewal date.
Several parcels, one set of records
Businesses that own or lease many sites often have parcels in several taxing districts. Errors multiply. Bills go to a former address, a sold site is still billed, or a lease makes the tenant responsible for tax on a property whose value has been corrected. Check lease terms for how tax is passed through, and compare the pass-through to the bill. Our article on common lease billing errors explains related charges.
A checklist before you question an assessment
- Gather the assessment notice and the most recent tax bill for each parcel.
- Request the property record card from the assessor.
- Compare lot size, building area, use and age with your own plans or surveys.
- Photograph the property and note any condition the record misstates.
- Collect your purchase contract, any recent appraisal and income and occupancy records.
- Find recent sales or assessments of similar properties nearby.
- Contact the assessor's office informally first, since a data error may be fixable without a formal appeal.
- Note every deadline and the office that receives each filing.
Where a partner firm fits
Property tax work combines valuation judgment with local procedure. A partner firm that handles property tax reviews can look at the record, the valuation approach and the filing path. You provide the documents and stay involved in the decision to file. [CONFIRM: a partner firm supplies and approves what its property tax reviews cover]
If you are a landlord or tenant, the lease audit and compliance category looks at whether tax pass-throughs follow the lease. The request page explains how to start.
Sources
- Property Description Errors Could Raise Your Tax Bill, KSN Law
- Assessment Appeals, Coles County, Illinois
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