The Mystery of the Property Tax Assessment

property taxes assessmentAppealing a high property assessment can save you thousands of dollars. Here are some points of advice for dealing with a high tax assessment.

1. Check your tax bill to see if the valuation is reasonable in comparison to similar homes in your neighborhood

Property taxes are collected by the municipality to pay for most municipal services (roads and road repair, street cleaning, park maintenance, etc). Essentially the municipality's assessor puts a value on your home, and then the Municipal Administration and Council agree on a local tax rate (or Mill Rate). You can't change the tax rate, but you can argue that you have been over-assessed. (Now, I must point out that the property tax assessment is NOT a home appraisal.)

Begin by checking the tax bill that you get sent in the mail each year. Your tax bill should include the "assessed value". You need compare this value to other properties on your block, or in other areas of town that are very similar to your property. For advice on other neighbourhoods priced similar to yours, ask your experienced realtor. More and more municipalities are putting their tax assessments online so you can now search by address.

2. Check for errors

If most of the houses on your block are 3 bedroom 3 bath houses, and you only have 2 bathrooms, chances are the municipality may have an error on your assessment. The assessor doesn't have a very sophisticated system to know how your house actually compare, because they don't actually enter into your house to perform the assessment.

3. Prepare your case

The more unique your house is, the easier it is to win an appeal. If you live in a cookie cutter neighbourhood, assessments are pretty accurate and it is pretty hard to dispute the assessment. Look at the sizes of your lot, age of your house, location relating to a busy road, or railroad, school, park, etc. compared to the other houses in your neighbourhood.

4. Aim for at least a 5% difference in price

Anything less won't be worth your while. Selecting the right comparison houses is the true art behind a successful appeal. Pick comparable houses that are within 100 sq. ft. of your house, 30 sq. ft. of a condo, or divide it down to a "per square foot price" for commercial properties.

5. Hire an appraiser if you need to

Sometimes paying $350 to hire an appraiser can save you a thousand dollars over a year or two of lowered taxes. Your appraiser can help you sort through your comparable neighbourhood addresses if you need to.

6. Appeal

Instructions to appeal are on the tax notice that you receive in the mail. Often, there is a phone number you can call and speak to the assessor. I've found that in smaller communities, the assessor prefers to hear from the property owner prior to a formal appeal.


7. What are your chances?

I've appealed taxes for some of my big clients in the past, and I'm successful more than 50% of the time. If we don't win, we are usually enlightened as to why the property is assessed at that price.

Bob Sheddy is the broker of record at Century 21 PowerRealty.ca in Drumheller, Alberta.

3 Comments

  1. Property Tax Assessment 02/26/2012 at 7:51 PM

    Hi......
    Your advice is very good and important ......thank you so much for your advice.....

  2. How to Appeal Tax Assessment 03/17/2012 at 11:31 AM

    Hey very nice helpful information given step by step about how to prevent from the burden of overtaxes property this web site!! Man .. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I’m happy to find a lot of useful information here in the post, we need work out more techniques in this regard, thanks for sharing. . . . . .

  3. Ashley 09/28/2012 at 9:30 AM

    What would you do in this situation. We bought a condo in St.Pierre, the taxes had not been assessed and were estimated at 1600 or so. They are the first condos in the area so it is hard to compare, they were assessed at 2500. Does that sound right? It sounds really high to me. I know they are brand new but they are only 600 sq feet on main floor and 600 on second.

Thank you! Your comment has been submitted and is awaiting approval.

Blog Archives

Tags