Property taxes: New highs, even as home values fall

Homeowners in Indianapolis’ well-to-do Meridian-Kessler neighborhood got a shock when they opened their mailboxes last summer, said E.A. Torriero in the Chicago Tribune. Their reassessed property tax bills were up an average of 35 percent and in some cases had doubled. Community residents, along with other angry homeowners in Indiana, expressed their outrage to state legislators. “The spreading sticker shock as homeowners opened bills statewide erupted into an angry backlash that led to the unseating of longtime incumbents and is now forcing swift legislative relief.” What happened in Indiana may be a foretaste of tax revolts brewing across the country.

When home prices were going up, it was hard to complain about rising property taxes, said Joe Light in Money. “Oh, how times have changed.” Property taxes have risen at twice the rate of inflation over the course of this decade, and in many places are still going up. This is because “many locales reassess properties to their ‘true market value’ only every few years.” That puts some homeowners in an unfortunate predicament, with taxes skyrocketing even as home valuations have plummeted. Don’t expect your assessor’s office to automatically lower your taxes: Instead, try to take advantage of the price plunge to appeal your assessment.

“You can ask for a reassessment any time you feel the assessed value of your home is higher than its market value,” said Peter McDougall in SmartMoney.com. Look at your last assessment to confirm that the description of your home is accurate. You may find, for instance, that the record shows more bedrooms than you really have—a factor that by itself can affect total taxes. “Next, determine the sale prices of five to 10 homes in your neighborhood that are comparable to your house.” If your home seems to have been overvalued, file a formal appeal. If your house actually looks undervalued, “count yourself lucky and enjoy lower taxes”—for now at least. Keep in mind that appealing these taxes won’t be easy, especially if prices are falling relatively equally across your entire region. “But if prices in your neighborhood drop faster than those in other neighborhoods,” you might be able to trim the bill.

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