Assessment Shock: Know Your Rights

By Elizabeth Razzi
Sunday, January 6, 2008

Homeowners are about to get black-and-white documentation of the latest changes in their property values. Because of the varying ways local governments go about valuation, don't be surprised if your home is still assigned a high value despite the sluggish housing market.

From now through mid-March, local governments are mailing property tax assessment notices. Be on the lookout for this important piece of mail. It's the foundation for the tax bill you will have to pay later. And its arrival starts the clock on a strictly limited appeals period.

Depending on where you live, you could have less than a month after the notice arrives to review the details and put together an appeal. An appeal would be in order if there are inaccuracies or if you can document that your home has been overvalued compared with similar properties.

Maryland residents were the first to receive their notices. The state assesses a property's value every three years. Notices mailed at end of December reflect a statewide average increase of 33 percent since those properties were last assessed, in 2004. That breaks down to an average annual increase of 11 percent to be phased in over the next three years.

For a Marylander's primary residence, those annual increases will be capped at rates that vary by county. In the Washington area, the caps range from 2 percent in Anne Arundel County to 10 percent in Montgomery and Calvert counties. Bottom line: Your assessment is going up, thanks in part to price increases during the peak of the real estate market.

For the first time, Maryland residents have to take action to ensure that they get the benefit of those annual caps. You must file a homestead-tax-credit application to document that the home is your principal residence and not a vacation or rental property, which wouldn't qualify for the cap. Applications can be filed at

The District and most Virginia counties and cities assess properties annually. In Virginia, procedures vary significantly among jurisdictions. Appeals windows range from less than 30 days in Falls Church to more than four months in Prince William County.

In Prince William, one of the areas hit hardest by foreclosures and stagnant sales, assessments for existing homes will decline by 14 to 16 percent this year, depending on the type of property, according to Allison Lindner, the county's real estate assessment chief. The reduced number of sales in 2007 has made this year's assessments a challenge, she said.

Although nearby foreclosures make it harder to sell your home at a reasonable price, they may not pull down your property assessment. Lindner said foreclosure prices don't reflect market value because they are not normal, arm's-length transactions.

"We don't put a lot of emphasis on foreclosure sales, and hopefully we will have enough non-foreclosure sales so that it's not an issue," Lindner said. "We are going to have neighborhoods where all we have are foreclosures or no sales at all. In that case, we will try to go to a similar neighborhood and establish market value."

And what if a home identical to yours sells for a bargain price in the next few weeks? Surely, you might think, that would be a strong argument for lowering your assessment. Alas, it won't. Sales after Jan. 1 will not count for appeals of this year's assessments. "We tell them we will use that sale for next year's assessment," Lindner said.

Valuing real estate is an imprecise art, so there could be reason to contest the government's estimate of your home's value. At a minimum, you need to ensure that the government has its facts straight.

¿ Be aware of when your assessment notice should arrive. If it's lost or delivered to the wrong address, you could run out of time for an appeal.

¿ Review the notice for factual errors. Is the lot number correct? (You can find that on the land survey tucked away with your home-purchase records.) Is the square footage correct? Are the numbers of bedrooms, bathrooms and fireplaces correct?

¿ Verify that your assessed value is in line with the values being assigned to nearby, comparable homes. Most jurisdictions have online databases of local tax records. They often update these records just before mailing assessment notices. An assessment higher than those for homes that are comparable to yours could be a compelling argument for an appeal.

Your first round of appeal should be to contact the assessor's office by the deadline listed on the notice. Local rules vary, with some requiring this first-round appeal to the assessor's office. If you are unsatisfied with the assessor's decision, you can present a more formal appeal to a review panel.

Prince William County is among the jurisdictions that allows a homeowner to skip the administrative appeal with the assessor's office and instead plead a case directly before the county's Board of Equalization by Aug. 1.

"Residents are not required to file an administrative appeal, but we prefer that they do," Lindner said. "If there is an error, or even if it is just too high, our preference is that they come to us first so we can fix it if there is an issue."

Details about your jurisdiction's appeals process will be printed with your assessment notice and can be found on your local government's Web site.

Even with a first-round appeal, you will need facts to back up your case. Assessors may decide to remeasure your home or confirm your claim that it has fewer bedrooms than stated in their records. You will need printouts from their property tax database demonstrating that similar homes are assessed at a lower value. Photos of comparable homes wouldn't hurt. If you need to research sales prices for similar homes, a real estate agent active in your neighborhood may be willing to help. You may also find that information in the county or city's online records.

"What we don't want to hear is people who come in and just say, 'It's too high,' " Lindner said. The appeal isn't the time to rant about local government spending, either. Tax rates and government budgets are beyond the assessor's domain. All the assessor is supposed to do is come up with a value for your home, so keep your arguments focused.

Finally, brace yourself for the idea that even a lower assessed value won't guarantee a lower property tax bill. A number of local governments are still considering increasing the tax rate to compensate for the revenue they stand to lose from lower assessed values.

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