Is There a Siliver Lining To The Real Estate Bubble Bursting?

September 18, 2012

Could there possibly be a silver lining to the continued downturn in real estate values?  Your employees who are underwater on their mortgages may not think so, but you can be their hero by sharing a secret to help them keep more money in their pocket and less money from being sent to the tax collector.  By tipping off your workforce about appealing their housing assessment, you can actually help them shave hundreds of dollars off of their real estate tax.

I recently had success fighting my own housing assessment on a piece of rental real estate that I own, which my county assessor’s office had valued this year at $133,000.  Now, if I could get $133k on this particular property, I’d sell it in a flash since I felt it was worth more along the lines of about $100k.  When I received the tax bill this year for $1,805, I immediately went online to find out how to appeal the amount.  What I learned was that I had a 30 day window in June to send in a written request to appeal, and I would then be assigned a court date in August to state my case. The instructions gave me 2 options – I could either bring in a recent professional appraisal or I could provide sales data on 3 comparable properties in the area that sold in the past 6 months. Since a professional appraisal would have cost me $450, I decided on a DIY strategy of looking up neighboring properties that had sold recently on websites such as www.realtor.com, www.zillow.com, and www.trulia.com and found 3 of the lowest sales prices to use.  The bad news for me was that based on the comps, my rental property is only worth $85,000, but the good news is that it brought my property tax down to $1,154 – giving me a savings of $651! The court meeting took only 5 minutes, and the assessor agreed with my numbers and stamped my file APPROVED.

Why should you take time out of your busy day to research your own local assessment rules for your employees?  Well, according to a Forbes article on Appealing Your Real Estate Taxes Yourself, typically fewer than 5% of taxpayers challenge their real estate assessment, but ValueAppeal, an online appeal service, estimates that about 25% of homes are overvalued on their real estate tax bill.  This certainly goes above and beyond your normal HR duties, but if you don’t tell them this secret to saving money, who will?