Challenging your property taxes could lead to “years of savings,” according to an expert. Here’s how.

Homeowners have noticed rising property taxes lately, a trend driven by increasing home values and local tax rates. Still, the valuations behind these taxes aren’t always set in stone. So, filing an appeal could mean significant savings over the years.

As of April, the median property tax bill in the U.S. for 2024 stood at $3,500, marking a 2.8% increase from $3,349 in 2023. This information comes from a report by Realtor.com.

Your tax bill largely depends on your location, with some areas featuring steeper rates and bigger hikes.

In New York City, for example, the median property tax for homeowners reached $9,937 in 2023, according to Lendingtree. The city ranks as having the highest median property tax among metropolitan areas. Following it are San Jose and San Francisco in California, where homeowners faced taxes of $9,554 and $8,156, respectively.

More than 40% of U.S. homeowners might save over $100 annually by challenging their property valuations, with estimates suggesting average savings of about $539 each year, according to Realtor.com.

“You’re saving a bank for years of savings,” stated Pete Sep, chairman of the National Taxpayers Union Foundation.

Some states need annual property tax reassessments, while others may go for several years before making any changes. Events like home sales or renovations can also trigger a review.

Here’s a brief overview of what to keep in mind before disputing a tax hike on your property:

Tax assessments determine how officials value properties for taxation. The selling price of your home is a major factor, but other variables can complicate things. Ultimately, the local assessment practices really shape your tax bill.

“This isn’t a national routine,” mentioned Melissa Kohn, regional vice president at William Ravis Mortgage.

Overvaluation of real estate is not uncommon, leading to higher taxes than warranted, according to Sepp. Things like overlooked inaccuracies during evaluations can be culprits.

For instance, if your home genuinely has 2,000 square feet but is incorrectly recorded as 2,500 square feet, or if it has three full bathrooms and one half-bath but is undervalued.

Such discrepancies are included in your property valuation, which often means you’re overpaying annually, Sepp mentioned.

Some estimates suggest that 30% to 60% of U.S. taxable properties are overvalued based on assessments from state evaluators.

Pursuing an appeal isn’t overly complex for homeowners, according to Sep. “The process is straightforward and fair,” he noted.

If your appeal is successful, the change typically applies for the current tax year, impacting your next assessment.

Your goal in challenging the tax is to demonstrate that the evaluator misapplied the assessment formula to your home, explained Sal Cataldo, a real estate lawyer.

Here’s how you can begin:

Start by checking whether your assessment is correct. If you’re in a reassessment cycle, obtain a formal evaluation and check public records from local evaluators.

Ensure your home details, like square footage and roof age, are accurate. If anything appears incorrect, gather evidence to support your claim. For instance, if your roof is reported as new but is actually old, keep invoices from past repairs.

Knowing the tax status of nearby homes can be helpful for your appeal, Cataldo mentioned. Since tax records are public, you can find out if similar homes are taxed less than yours, which could highlight an overvaluation.

Also, some neighbors might pay less because they qualify for exemptions.

You might qualify for exemptions based on your town or city rules. Common ones target seniors, active military members, veterans, low-income families, or individuals with disabilities.

Don’t miss appeal deadlines, which can be buried in fine print, cautioned Sepp. The timeframe to submit documents can vary, often requiring submissions 30 to 45 days before the deadline.

Sometimes, it’s wise to consult real estate agents or appraisers familiar with local valuations. They can assist you in comparing your home’s worth. Before hiring, do your homework to understand their services and costs.