Rory S. Coakley is founder and president of Rory S. Coakley Realty, Inc., a full-service residential and commercial real estate company operating in the Washington area since 1989.
Property tax assessments are done every three years in Maryland and once a year in Virginia and Washington. Each jurisdiction is unique, with its own culture, forms, systems and processes.
A plethora of data goes into a property assessment: lot size, square footage, number of baths, garage size, whether there is a finished basement, whether there is a pool, and so on.
Did a tax assessor visit your property in developing this assessment? Probably not. Residential assessments in this region are generally done using a mass appraisal process; individual assessors do not go into each and every home.
No matter what process is used to determine the assessment, as a homeowner and taxpayer you should pay only your fair share in real estate taxes. Local assessment offices are often understaffed and overworked — they can struggle to handle the thousands of properties they are required to assess. They do the best they can without going to very many properties, and there is plenty of room for error. This can mean bad news for homeowners. Whether it is due to the assessor being unaware of specific conditions affecting a property or human error, when there are problems with your real estate tax assessment, it’s money out of your pocket.
Upon receiving the assessment notice, the property owner is allowed to file a real estate tax appeal which can affect his or her taxes for several years to come. If you suspect your real estate tax assessment is higher than it should be, or that it is incorrect, don’t wait. Make sure you contact the state or county assessment office, depending on where you live, within the time frame allowed for filing an appeal.
In Maryland, the appeal must be filed within 45 days of the date of the new assessment notice. Meeting this deadline preserves your right to have a mail-in appeal, telephone hearing or in-person hearing with an assessor. It’s best to insist on having a face-to-face meeting.
Once you file your appeal, start the process by requesting copies of the assessment worksheet on your property (there may be a nominal charge). Analyze that worksheet to determine where there might be errors or flaws. To see a sample of the worksheet used in Maryland, go to http://www.dat.state.md.us/sdatweb/Worksheet.pdf.
Information and evidence needed to support your appeal could include:
• Sales comparables
• Architectural drawings
• Site plans or plats
• Topographic surveys
• Other documentation critical to your appeal process.
If you decide to appeal, keep in mind that challenging an assessor’s opinion takes expert training in areas such as appraisals, state and local mandates, approaches to valuation and negotiation techniques — as well as knowledge of the assessment office’s techniques. Given this complexity, it might make sense to have a real estate professional who is experienced in tax appeals review your assessment. The tax appeal pro can give educated and knowledgeable recommendations as to whether an appeal would be the right choice for you.
It’s like trying to handle a legal matter without a lawyer. The tax appeal consultant is the homeowner’s advocate. Not only that, but a tax appeal consultant will have access to pertinent information, such as appraisals on similar properties, that the homeowner does not have. Also, the consultant knows the right questions to ask if there is a need to challenge the basis for the assessment.
There is a risk involved in filing an appeal: It could open the door to a possible tax increase. But the benefits far outweigh the potential risk. Successfully appealing your tax assessment means increasing cash flow and minimizing operating costs.
As a property owner, you should only pay your fair share of real estate taxes. That is the bottom line.
Here’s how to contact some of the area tax assessment offices:
• Maryland State Department of Assessments and Taxation: http://www.dat.state.md.us
• D.C. Office of Tax and Revenue: http://otr.cfo.dc.gov/
• Fairfax County Department of Tax Administration: http://www.fairfaxcounty.gov/dta/
• Arlington County Department of Real Estate Assessments: http://topics.arlingtonva.us/realestate/