Property Tax Appeals: Should I Pay Taxes with an Appeal Pending on My Valuation

The rules for property taxes are set by local municipalities and the amount you pay in property taxes is generally based both on where you live and on the assessed value of your home. Taxes are generally paid on both raw land and on lots that have been improved with buildings and other structures.

When a structure is built, its value is assessed to determine the tax liability on the improved lot. The value of the property will generally be reassessed if any permitted improvements are made or on a periodic basis as determined by your local tax office. Because your property taxes are based on the assessed value of your home, if you do not agree with the stated worth of your property, you can appeal that valuation.

The Appeals Process

The appeals process is different from state to state. In general, however, you must file a formal written notice of appeal to get the process started. There is typically a deadline for filing this appeal. In New Jersey, for instance, tax appeals have to be filed either before April 1, within 45 days of the mailing of assessment notices or by May 1 if a municipal-wide assessment is instituted. You should be sure you have evidence to support your appeal and your assertion that your property has been incorrectly valued. 

When you file an appeal, you usually must then attend a hearing before the county tax board or county tax authority. The hearing will be scheduled within a few months of the initial filing of appeal. Typically, those on the board are appointed by the governor or other local official. In most states, you may represent yourself at this hearing if you choose to do so, although it is often advisable to have an attorney to help prove to the board that you are deserving of an appeal.  Because the taxing district generally has legal representation, you will be at a disadvantage if you go in unrepresented. Businesses or those other than private individuals who are appealing their taxes may be required to have an attorney.  Tax hearings are typically open to the public and anyone may attend.

Paying Taxes Due

While your appeal is pending, you should still pay the taxes that are due, even if the amount is in dispute. Failing to pay your taxes prior to the due date can increase your tax burden as you will be assessed interest and penalties. You may also have a lien placed on your home, your home foreclosed on or other legal action taken against you, depending on the local rules and the amount past due.  Further, most appeals boards will not hear an appeal unless you are current on all of your taxes.

The Hearing

At the hearing it is your burden to prove that the property is improperly assessed. You may do this by using expert witnesses, such as professional appraisers.  You should also have "comparables" which are sales figures of other similar properties in your location. For instance, if your home was assessed at $200,000 and the same house down the street just sold for $125,000, then you can use the "comparable" market value of the other house to prove that your assessment was too high. If there are special restrictions or conditions associated with your property that affect the value, such as conservation restrictions, you should be sure to provide proof of those limitations as well.

The more solid and clear evidence you have of why your home has been overvalued, the better your chances of a successful appeal. An attorney can help you to gather the evidence that you need, but in the meantime, you must continue to pay your taxes as required to avoid legal complications and consequences.