More Property Tax Appeals Landing in Court

 Property owners throughout New Jersey have observed that more tax appeals are headed to trial. More than ever, cases that would have been settled had they occurred a few years ago are now routinely in the litigation track.

What’s behind this trend? The most significant reason is that government is under increasing pressure to preserve the municipal treasury. And as the drive for tax revenue brings more taxpayers to court, many of those property owners find an uneven playing field during litigation. The assessment is presumed to be correct until it is overcome by the preponderance of the evidence. The level of proof the taxpayer must provide to reach this standard has become increasingly more difficult to attain.

One useful aid in arguing a property owner’s appeal is often overlooked because it comes right out of the appraiser’s tool box. The Uniform Standards of Professional Appraisal Practice (USPAP) can help to level the playing field for the property owner. Taxpayers need to understand this set of regulations because it affords opportunities to attack the credibility of the taxing jurisdiction’s presentation.

Any licensed appraiser in the state of New Jersey is subject to USPAP, which mandates that an “appraiser shall ensure that all appraisals shall, at a minimum, conform to the Uniform Standards of Professional Appraisal Practice.” An appraiser’s failure to comply with the provisions of USPAP may be construed to be professional misconduct in violation of New Jersey tax law.

For example, USPAP sets minimal standards for the retention of records, referred to as the “recordkeeping rule.” An appraiser must prepare a work file for each appraisal, appraisal review or appraisal consulting assignment. A work file must exist prior to the issuance of any report, and a written summary of any oral report must be added to the work file within a reasonable time after the issuance of the oral report. Such a work file must include the report as well as the information used in creating the report.

The standards set time requirements as well. The work file must be retained for at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last. Any appraiser who willfully or knowingly fails to comply with the obligations of this recordkeeping rule is in violation of the state’s ethics rule.

In further clarifying the recordkeeping rule, USPAP states that it applies to “appraisals and mass appraisal, performed for ad valorem taxation assignments.”

USPAP is adopted by statute, so a violation of its standards may leave a violating appraiser susceptible to sanctions imposed by the governing professional association. In addition, New Jersey’s tax statute provides explicitly that for engaging in an act of professional misconduct, the professional licensing board may penalize the offender by suspending or revoking any certificate, registration or license.

It is not unusual to find situations where appraisers are brought in to assist tax assessors in setting assessments. This is certainly understandable when complicated properties are being appraised. Now, however, as the appraiser advises the assessor as to value in setting an assessment, that advice and conclusion is now discoverable by the taxpayer. This presents a significant opportunity for taxpayers to discern the machinations behind the setting of an assessment.

Under USPAP, the appraiser must have a work file demonstrating all of the evidence relied upon to determine that value. It does not matter whether the advice given the assessor is written or oral; the work file must contain written evidence supporting the advice and conclusions given to the assessor. This now becomes a potential gold mine of information that can be used to damage the presumption of correctness of the assessment.

In another common scenario, taxing jurisdictions that rely on outside appraisers to assist the assessor in setting the assessment will typically retain those same appraisers to defend the assessments before the tax court. Because of the backlog of cases in the tax court, this means that an appraiser that originally assisted in setting an assessment could be testifying about value several years after the assessment was set.

This presents an opportunity for the taxpayer to probe the appraisal report prepared for trial and compare it to the work file prepared when the assessment was made. Was the value predetermined because of the early work in setting the assessment? Does the early work erode the conclusions of the later work?

These are all important considerations, and will significantly help to level the playing field against recalcitrant taxing jurisdictions. Appraisers who lend their licenses and credibility to taxing jurisdictions in setting assessments need to be aware that there could be a day of reckoning.

Property Tax Increases Looming In Many Areas

Local governments across the region are trying to find millions of dollars to balance the books. "This year is a tremendous challenge," said Washington County, TN mayor Dan Eldridge.

It seems almost every local government is having the same problem.

The City of Bristol, Virginia has been borrowing money to pay the monthly bills for years.

They hope to reduce those loans next year, but to balance the 53-million dollar budget, the city council is expected to raise property taxes 5 cents.

"We can't annex so what you see is pretty much what you get," said Bristol, VA mayor Ed Harlow.

Across the state line in Sullivan County, the budget is $168 million, but the mayor says it may take raising taxes to fill a roughly $4 million hole.

"One penny equals 300 thousand, probably talking 7, 8, or 10 cents something like that," says Sullivan County mayor Steve Godsey.

Washington County, TN mayor Dan Eldridge explained, "the issue we are dealing with this year is flat revenue." His county has a $121 million budget, but right now they are in the red $10.5 million for next year.

Property owners there may not be paying more, though. "The discussion of tax increase has to be last," said Eldridge.

Eldridge says the fastest way to turn the trend around is new home construction, because it's the fastest way to increase the tax base, but along with that is the need for jobs to attract people here, that would want to buy new homes, and increase land values.

Until then many say the trend may be far from over.

Unicoi and Greene Counties are both still working on their numbers.

Greene County's budget director says they expect a large funding increase request from the school system, and in Unicoi County they are working on a way to cover a nearly 40-percent increase in health insurance costs.

Professional Tricks to Lower Property Tax Assessment

 One of the best investments I made in my home this year was to hire somebody to prove that its value had fallen.

I know this sounds daft, but it resulted in a lower property tax bill. In our case, our taxes dropped by $1,000 to around $10,000 for the 2011 tax year. But we didn't challenge our taxes ourselves - we will pay a specialized property-tax consultant $250 - 25 percent of our tax savings - to appeal for us.

If you owe more than your home is worth and you want to stay in your home - or just can't sell - taxes are the one fixed cost you can have some success in reducing. (You can also try to refinance to a lower mortgage rate, but that can be difficult or impossible when you haven't any or enough home equity.)

To begin your home-assessment challenge, you can either hire a consultant to appeal your assessed valuation locally as my wife and I did, or do it yourself.

Part of this story is hardly satisfying. We knew our home value declined by at least $50,000 in the housing bust. Our estimated market value now is roughly what we paid for it more than a dozen years ago when we built it. Fortunately, due to a large down payment, we are not under water, although that equity value probably will not be coming back soon.

It's never made more sense to challenge your home assessment than it does now, although relatively few do. Some 11 million properties are underwater, meaning due to equity loss, the mortgages on these homes exceed the value of the properties, according to CoreLogic. Taxes will not necessarily track the depleted equity values, so you have to see if your local assessor has valued your property correctly.

Adding salt to homeowners' wounds is the ongoing, disheartening erosion of home prices in most cities: Over the past year, 15 of the 20 largest markets have experienced declines year-over-year through February, according to the S&P Case-Shiller Index. U.S. home prices are now at their lowest level since 2002.

The disparities between what homes are worth on the open market now and what they are assessed at for tax purposes can often be huge. The National Taxpayers Union estimates that from 30 to 60 percent of U.S. properties may be over-assessed, though only 5 percent of property owners challenge their assessments.

The gap between assessed and market value is even larger in some areas where assessors haven't accurately marked down home values due to the housing bust. That is one reason why there were more than 25,000 assessment appeals in my county in Northern Illinois last year, compared to 17,000 the previous year. You will have to do the research on your own to tell if you're properly assessed since each property is assessed differently depending upon home type and local market conditions.

Should you choose to go solo on your assessment challenge, you will need to find three comparable properties that have declined in value. Also check the property description with your assessor to see if it's correct. If the assessor erroneously included in your property record a finished basement or more living space or amenities than you actually have, you can correct it by contacting the assessor directly. That could result in an immediate assessment reduction.

Are you a senior citizen or a veteran? There's another way you might be able to save on property taxes. Check to see if you qualify for a special exemption. You also should have a homestead exemption for living in your home. You also may receive a break on recent improvements or energy-producing appliances like solar panels. While this is not part of the appeals process, it might be another way of saving you money.

Having tried appealing on my own in past years with meager success, I would recommend you hire a consultant. Assessors are really in the business of pooling money for taxing bodies; many of them are not homeowner friendly and assessors may guard the data and methods they use to value homes zealously. I discovered this years ago the hard way, and helped set up a nonprofit group in my area to inform homeowners on how to deal with assessors.

Most private consultants will take a percentage of your tax savings or a flat fee, or both. They should be experienced assessment professionals (mine worked in a township assessor's office) or a professional appraiser. You can find these consultants through a search engine. Enter "property tax consultants" for your county. We found ours through a neighbor's referral.

Keep in mind that an appraisal for a bank is not the same thing as a valuation for the assessor. It's a different animal and your assessor may not accept a current real-estate appraisal.

If you cannot reach an agreement with your local government assessor on a lower home value, then you can appeal at the state and county levels, although that typically involves more time and paperwork. Many appeal boards are incredibly backed up and if you miss their deadlines, you'll have to wait another year.

Here is another misconception you need to avoid: While you can lower your home's assessed value, it does not always translate into a lower tax bill. The other side of the equation is what rates local taxing bodies such as schools, fire districts and counties charge you. They can - and will - raise their rates to cover their budget shortfalls. So you can have situations where home values have plummeted, but tax rates go up to cover revenue shortfalls.

Begin planning your assessment challenge now. You will not only lower your total ownership expenses, but make your home more marketable. A lower tax bill than your neighbors adds considerably to curb appeal when it comes time to sell.

York, PA -- Paying too much for property taxes? Challenge it.

Trying to Lower Your Property Taxes?

That's the course of action taken by some property owners who believe their home's value may have dropped since the last countywide assessment in 2004.

In 2009, there were more than 360 property appeals in York County that were not dropped or settled. Those cases resulted in a countywide decrease of $34.4 million in assessed value, according to a York Daily Record report.

Q: What does 'assessed value' mean?

A: Assessed value is the fair market value of a real estate parcel the year the last county wide assessment was performed. This number appears on both the spring tax bill and the summer tax bill that each property owner receives.

Q: Of all of the appeals, what is the average reduction in assessed value?

A: The range of reductions obtained is between 10 percent and 50 percent. Where each property falls within that range depends on numerous factors including location of home, size of home, age of home, etc.

Q: In an appeal, is an appraisal report necessary if using comparable assessed properties as justification?

A: An appraisal is essential to the process. Other assessed values are not considered.

Q: How do I establish current market value for my property?

A: The best advice we can give you is to hire a competent attorney and appraiser to establish the current market value for your property. Make sure to check their credentials and expertise in the field of real estate tax assessment appeals.

Q: What is the deadline to file an appeal?

A: The deadline for filing a tax assessment appeal for residential or commercial property in York County is July 1, 2012.

GEORGIA - Property tax rates on the rise

Property tax rates in four of the five counties around Lake Gaston are headed for a rise in the coming fiscal year.

The Mecklenburg County Board of Supervisors has already adopted a budget for fiscal year 2013 containing a two-cent real estate tax increase. County boards in three other Lake Gaston counties — Northampton, Warren and Brunswick — are currently mulling proposed budgets that increase the property tax rate more than that.

Meanwhile, Halifax County has a budget proposed that keeps the property tax rate the same.

In Northampton County, which currently charges 87 cents per $100 property valuation, the Board of Commissioners is considering raising the property tax rate five cents to 92 cents per $100 valuation, according to clerk to the board Kimberly Turner.

Turner said the board would hold a budget work session this Friday at 10:30 a.m. ahead of a public hearing on the budget on Monday, June 18, at 1:30 p.m. Turner said the board usually adopts the budget on the same day as the public hearing.

Warren County manager Linda Worth presented her draft budget on May 7, which called for a four-cent property tax increase from 62 cents per $100 valuation to 66 cents per $100 valuation. Worth said the county’s revenues have been “severely impacted” by the current economic recession.

The Warren County Board of Commissioners has its public hearing on the budget scheduled for Monday, June 11, at 6 p.m., followed by a budget work session on Thursday, June 14, at 1 p.m. Adoption of the budget is scheduled for Wednesday, June 20, at 6 p.m.

Brunswick County is working off a proposed budget that increases the property tax rate eight cents, from 39 cents per $100 valuation to 47 cents per $100 valuation, in addition to other tax increases.

The proposal met stiff competition at a public hearing May 16. The Brunswick Board of Supervisors is scheduled to adopt a budget on Wednesday, June 20, at 7:30 p.m.

Halifax County manager Tony Brown submitted his budget proposal May 21, which suggested keeping the property tax rate at 68 cents per $100 valuation. The Halifax Board of Commissioners held its budget public hearing June 4 and is scheduled to adopt a budget June 18 at 9:30 a.m.

In Mecklenburg County, supervisors approved the property tax rate rising from 36 cents per $100 valuation to 38 cents per $100 valuation. Citing a need to raise revenues because of issues with teacher salaries in the Mecklenburg County public school system, the board approved the budget May 31.

Fiscal year 2013 budgets will be effective from July 1, 2012, until June 30, 2013.

To leran more about propert taxes please visit  http://findapropertytaxlawyer.com/.

What is Property Tax?

Property tax is a levy issued by a government on a person's real or personal property. The property is assessed to give it a value, and then that value is taxed. The amount of property tax owed is determined by multiplying the fair market value of the property by the current tax rate.
The amount taxed on a given property may change over time based on a reassessment of the property's value. Typically, property tax is not increased as the value of the home naturally increases; the value of the tax generally remains based on the value of the property at the time it was purchased. Major improvements, however, like building an addition to an existing home, or building a home on a vacant piece of land can trigger reassessment and therefore an increase in the property tax levied. Property tax laws vary by jurisdiction; to be sure of those laws that apply to a particular property, one should consult the appropriate regulatory board or a professional in the field.
Property tax payments are due annually in most cases, although the annual amount is frequently divided into periodic installments. This may mean quarterly payments, which is common with commercial property. With homes, it is often charged in monthly installments, which may be added to mortgage payments.
Property tax is known by other terms as well, sometimes referred to as a realty tax because it is most often levied against real estate. It is also called an ad valorem tax, which simply means the tax rate is established by the value. There are also different kinds of property taxes, such as personal property tax. This is usually assessed and charged separately from real property tax and includes personal possessions like automobiles, motorcycles, campers and boats.
Local governments such as cities and counties derive revenue from property tax. Property tax revenue is generally used for government administration and expenses for first responders such as law enforcement officers, firefighters and paramedics. It is also used to fund local courts. Property tax also helps pay for services including community programs, parks, civic centers, libraries and schools. Quite often, school districts receive a large portion of property taxes.
Typically, the state also collects a portion of property tax revenue. In the United States, the power to levy and collect any type of property tax is considered a state's rights issue. It is not readily recognized as one of the powers of the federal government.

Proposed legislation would end property tax funding for schools in Pa.

HARRISBURG, PA -- Senior citizens and other homeowners on fixed incomes are enthusiastic about a proposal that would drastically reduce the burden of residential and commercial property taxes by eliminating the big slice that funds public schools.

But there's a serious political risk in House Bill 1776, nicknamed the "Property Tax Independence Act," sponsored by Rep. Jim Cox, R-Berks.

Many of his colleagues worry about the higher state income tax and state sales tax that the bill calls for. It also would extend the sales tax to many goods and services that have always been exempt -- even including taxing certain food and clothing purchases and nonprescription drugs.

At the House Finance Committee last week, legislators from both parties, including Reps. Kathy Rapp, R-Forest, and Phyllis Mundy, D-Luzerne, expressed hesitation about how their constituents will react to the idea of a controversial shift in taxes. Previous proposals to radically change the state tax structure have failed.

Mr. Cox contended his bill is urgently needed. He said that even when longtime homeowners finally pay off a 20-year or 30-year mortgage, they're still faced with "renting" their house from the government because they have to fork over several thousand dollars each year for property taxes, which go to the school districts, counties and municipalities where they live.

"No tax should have the power to leave you homeless," Mr. Cox said. "We have to end the practice of kicking senior citizens and widows out of their homes because they cannot afford to pay their property taxes."

But to eliminate school property taxes around the state, the Legislature must come up with a huge amount -- an estimated $10 billion -- in replacement revenue. Mr. Cox has three ideas:

• Raising the state income tax rate, now at 3.07 percent, to about 4 percent. That would bring in an extra $3.5 billion, he estimated.

• Raising the sales tax rate, now 6 percent in most counties, to 7 percent (and to 8 percent in Allegheny County, which is already at 7 percent due to the Regional Asset District tax.) That will generate an additional $1.5 billion.

• Eliminating the sales-tax exemption on many goods and services that are now not taxed, producing $4.6 billion.

The rest of the needed $10 billion would come from an existing tax on slot machine revenues, created when casinos were legalized in 2004.

Under the proposed 7 percent sales tax rate, clothing and shoe purchases over $50 would be taxable, as would purchases of food and grocery items that aren't contained on the WIC list -- healthy, nutritional foods on a list called Women, Infants and Children, compiled by the federal government.

For example, Mr. Cox said, sugary cereals would be taxable, but healthier cereals that have no sugar coating would not be.

Items and services that would become taxable under the bill include dry cleaning, funeral expenses, amusement parks, flags, gum, newspapers, magazines and candy.

"I love M&Ms as much as the next guy," Mr. Cox said, "but I'd be willing to pay an extra 7 cents for a $1 bag of candy if it meant my [school] property tax bill would disappear."

•

Property taxes have been a headache for legislators for several decades. "We have tried for years to address this burdensome issue," but without success, Ms. Mundy said.

She noted a 1988 statewide referendum where an effort to raise other taxes to generate funds to get rid of property taxes was defeated 3-1 by voters.

But that hasn't stopped lawmakers from trying. Besides Mr. Cox's bill, another measure, House Bill 2230 by Rep. Seth Grove, R-York, could come before the state House for consideration before the July 1 break for summer recess.

It would allow counties to increase their county sales tax by 1 percent and use all the additional money to reduce property taxes. But the higher sales tax would have to be approved by county residents in a referendum.

The property tax issue also arose in 2004. School tax relief was one of the two main arguments for passage of the state gaming law, which legalized slot machines in 2004. (Helping the horse-racing industry was the other).

Most legislators consider slots revenue as only a modest aid in easing the property tax burden. The average relief most homeowners get from slots is $200 a year, far less than most people's property tax total.

The school property tax issue has become especially critical for legislators from many areas of Eastern Pennsylvania, which are growing due to an influx of people from states with even higher taxes, such as New York and New Jersey.

In Monroe County, which borders New Jersey, officials said housing prices are rising and property taxes for many homeowners have jumped to as much as $10,000 or $12,000 per year.

They want the state to do something to keep people from losing their homes.

But legislators from Northern or Western Pennsylvania, which have had much slower population growth or even population declines, balk at raising the sales tax and extending it to exempt items.

•

Businesses whose products would for the first time be taxed have, predictably, begun opposing the Cox bill. The Pennsylvania Newspaper Association made its opposition clear at last week's hearing.

The bill would impose the sales tax on newspaper sales, promotion and advertising, said Bernard Oravec, publisher of the Williamsport Sun-Gazette.

"Most states do not charge the sales tax when consumers buy a daily or weekly newspaper, nor do they tax newspapers on their circulation revenue," he said.

The newspaper association "believes that such taxes are bad for business and bad for democracy," he added.

The Pennsylvania School Boards Association said it would like to see a more diverse "mix of local taxes" given for funding schools, but added, "PSBA does not support any proposal to totally eliminate school property taxes."

Nothing will happen regarding the Cox bill before the House finance panel holds another hearing June 4.

It isn't known yet if the bill will come up for House floor action before the summer break starts July 1. Two major items will come up first for action in June -- adopting a new state budget for the fiscal year starting July 1, and, possibly, more debate on whether to privatize the sale of wine and liquor.