Property Tax Assessments May Be Inaccurate, Costing Homeowners Thousands

Property taxes on single-family homes in the United States have surged by over 25% since 2019, according to a recent report by real estate analytics firm CoreLogic. This increase outpaces even the substantial 33% rise in average home sale prices over the same period, as reported by Federal Reserve data. However, experts caution that higher property values don’t necessarily justify proportional increases in tax assessments, leaving many homeowners potentially overpaying.

Property tax assessments aim to estimate fair market value at a specific point in time, but the process is far from perfect. Colton Pace, co-founder of Ownwell, a company specializing in property tax reduction, explains that local governments use mass appraisal techniques to value millions of properties simultaneously. This approach, while efficient, leaves significant room for errors and discrepancies.

‘The value that is put on an assessment notice is an opinion,’ Pace states. ‘They’re valuing millions of properties all at the same time. So there’s lots of room for errors.’ These inaccuracies can lead to inflated tax bills for homeowners who may be unaware that they have grounds for appeal.

Debbie Loesel, a Senior Tax Manager at Deloitte, emphasizes that tax assessments are not equivalent to professional appraisals intended to determine a property’s true market value. Instead, they rely on standardized formulas and mill rates set by local governments to meet budget requirements. This system, while necessary for large-scale assessments, can overlook important property-specific factors that affect value.

For homeowners looking to challenge their property tax assessments, understanding the variables involved is crucial. Sales comparisons are commonly used to assess residential real estate values, but this method can fail to account for significant differences between neighboring properties. Pace provides an example: ‘You can get a discrepancy in assessments if you have an older home next to a new one.’

While homeowners have the option to appeal assessments on their own, the complexity of the process often necessitates professional assistance. Traditional routes, such as hiring a local real estate attorney, can be expensive. Companies like Ownwell offer an alternative, providing comprehensive analysis and appeal services without upfront costs.

Ownwell’s approach combines proprietary technology with local expertise to build strong cases for tax reduction. The company manages the entire appeal process, from paperwork filing to representing homeowners at appeal board hearings. Notably, Ownwell only charges a fee if they successfully reduce the property tax bill, taking a portion of the realized savings.

The company reports an 86% success rate in securing tax reductions for its clients, with average savings of about $1,150. This success highlights the potential for significant overpayment in current property tax assessments across the country.

Importantly, Ownwell conducts thorough risk assessments before pursuing appeals, ensuring that their actions won’t inadvertently lead to increased tax bills. The company emphasizes the importance of annual property tax reviews to ensure accuracy and fairness in assessments.

As property taxes continue to rise, homeowners are encouraged to scrutinize their assessments and consider professional assistance in challenging potentially inflated valuations. With companies like Ownwell offering risk-free analysis and appeals, property owners have new tools to ensure they’re not overpaying on their tax bills.

The impact of accurate property tax assessments extends beyond individual homeowners, affecting local government budgets and overall community equity. As more property owners become aware of potential overassessments, it may lead to more equitable taxation and improved allocation of public resources.

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