How We Fought Our Real Estate Tax Appraisal And Won – Part 1

This is the start of a two part series on how we fought “the Man” and decreased our property taxes by about $1,700 per year – that’s a savings we get every year now! 


A little over three years ago, we bought our first home. It was a modest home, purchased out of foreclosure during the depths of the real estate crisis, and we got a heck of a deal on it. And knowing the county’s property tax millage rates, we were pretty comfortable that our property taxes would be well within our comfort range.

So you can imagine the displeasure when a couple months after we closed on the house, we got our first property tax bill and it was double (yes, 2x!) what we were expecting to pay. Not to mention the taxes computed at the closing of the house had been prorated at the expected amount (~$1,700), so now we would not only have have to make up the difference for the part of the year that we owned the house, but for the rest of the year that the seller had owned the house as well.  F-abulous.

Fast forward three years, and we’re incredibly happy with how much we pay in local property taxes. So what happened?

Quite simply, we fought “the Man” and won. And here’s how we did it.


Step 1 – Learn the Rules of the Game

There were two main reasons that the bill we got was for over $3,400 instead of the $1,700 we were expecting.

1. The homestead exemption had been dropped. In Florida, if you are a permanent resident, you can homestead your primary residence to get a $50K credit against the home’s taxable value. This is called your homestead exemption. (The amounts differ in other states, but many have homestead exemptions.) When the bank we purchased the house from had foreclosed on the house, due to the timing, the homestead exemption was dropped. We could renew it for the next year, but there was nothing that could be done about it for that year. We had to eat the taxes on $50K worth of house that year. Sucks, but that’s the rule. Okay.

2. The country property appraiser jacked up the taxable value of the house. Did I mention this was in the middle of the RE crash? And our county was one of the worst hit in the entire nation. And yet, our county property appraiser was claiming that our home was worth over $226K when we had just purchased it for a net price of about $130K. Something smelled funny, so I had to learn the exact rules.

Here’s the gist. Property appraisals in our county (and many others) are based on what the house was worth on January 1. So any sales that occurred AFTER January 1 are not taken into consideration when figuring out the value of the home. That meant our home sale wouldn’t be taken into the calculations for the taxable value of the house until more than a year after we purchased it. In a housing market where prices were changing incredibly quickly, this was a huge delay.


Step 2 – Before You Fight, Make Sure You’re Right

Now that I knew the rules – basically that I needed to know what our house was worth on January 1, not on the day we bought it – I did a gut check to see if what the property appraiser was claiming was realistic.

If he was right and our house was worth $226K on January 1, that meant that in the ~8 months between then and when we bought it, the value dropped by $96K, or about 42% during that time period. Prices were changing pretty rapidly, but seriously, 42% in 8 months… that’s insane! And agreed. Stats on our zipcode indicated that prices dropping pretty steadily at a rate of only ~20%/year over the last 20 months. So 42% in 8 months was insane. Our property appraiser had to be wrong. The only teeny detail was that I couldn’t use our sale to prove it (since it happened after January 1). So I had to find another way.

I felt confident I was in the right, even if I didn’t have usable evidence yet, so I filled out a request to formally challenge our home’s valuation with the local Value Adjustment Board. (That’s what we call it in Florida, but most places should have a process for this type of challenge.)

For the evidence, I used the property appraiser’s own methods against him. Legally, the property appraiser had to share his market comparable analysis (aka comps) valuation with us since it’s a matter of public record. So I picked it apart and showed why the comparable sales he chose were “bad” comps, and why the comparable homes that I chose (with the help our relator’s MLS database and some diligent public records searches) were much more appropriate comps.


  • His comps were built about a decade after our “older home” was built, so I expanded the comps pool to include homes so that the average age of my comps pool was the same as our home’s age.
  • I adjusted for differences in the size of the homes, since ours is one of the smallest homes in our area in terms of “livable square footage”. Note – livable square footage is different from total square footage, and is the correct number to use when calculating $/sqft.
  • None of the comps he included had pools, and he was adjusting the value of our house up by $20K for having a “pool package”. I made sure my group had some with pools, and some without. I used his same $20K for a basic pool adjustment, and an additional $5K adjustment if the comp had a jacuzzi since ours does not.
  • I also added an adjustment for garage space. His analysis had our 1-car garage as on-par with 2-car garages. If you’ve ever had a 1-car garage, you know that’s a load of bull. I added a $10K adjustment for each car space in a garage in the comps list.
  • I adjusted for the time between the date of the sale and January 1 using the percent change that had recorded in our zip code the previous year. The county appraiser was using a smaller percent change to create his time adjustments.

With that baseline, I made an easy to read spreadsheet where I showed each of the comparable sales, and then the adjustments that were needed to their sale values to make their features “apples to apples” with our home.  For example, if a comparable home had a jacuzzi where ours didn’t, that’s a -$5K adjustment. If a home had no garage where ours has a 1-car garage, that’s a +$10K adjustment. With 12 sales on my list to his 3, the averages ended up hitting exactly where I expected them to after all the adjustments were made.



My analysis conceded that our home was probably worth ~$150K on January 1. More than what we paid for it, of course, but in line with the trends that produced our sale at a net of ~$130K later that year.

Following the rules, I submitted my analysis ahead of our “court date” and waited.


Read on to Steps 3 and 4, which continue in Part 2.


Have you ever done this type of analysis or really tried to understand how home values are calculated? Would you give it a shot if you thought there was a chance that you could lower your tax bill by almost $2K every year in perpetuity?

37 comments to How We Fought Our Real Estate Tax Appraisal And Won – Part 1

  • I have to wait for the rest? What is this, “Downton Abbey, the PoP Edition?” 😉

    I’ve been lucky that my real estate assessments on both properties have been fair. I’ve had both clients and friends ask me for advice to fight their assessment, so I love what you’re showing here. Always have facts and avoid any emotional argument. You’ll immediately lose if you get emotional and don’t have enough data. Great piece. Can’t wait for more. Feel free to send me the rest early to err…..proofread…..
    AverageJoe recently posted..Hiring a Financial Advisor: Clues from the ReceptionistMy Profile

    • Downton Abbey? Can I be lady Sybil? =)

      How did fighting the assessments work out for your clients and friends? Any success?

      • Is your husband a former driver for a rich family? If so, then, yes you can!

        Friends were a mixed bag (I don’t feel comfortable giving them financial advice unless they ask…of the two that did, one won and one lost….longer story). Clients were a different matter. I’m happy to report that I remember three cases for clients, and they won all three times!
        AverageJoe recently posted..Joe’s Top Movies of 2012My Profile

        • Mr PoP is my weekend driver =)

          Glad that the clients had success – and I can understand the discomfort with friends. It can be a real mixed bag to talk about financial matters with them sometimes.

  • This post is very informational. Yes, I would totally fight the man if it meant getting a reduction in taxes.
    SavvyFinancialLatina recently posted..Fitness Recap Week 1My Profile

  • very nicely done.. can’t wait to hear the rest.

    i bet that many folks just take the increase and don’t dare to challenge it. it sounds like you were very clearly being wronged, and kudos to you for being willing to stand up for yourself.
    jefferson @SeeDebtRun recently posted..Wishing For WalkabilityMy Profile

    • What’s crazy is the number of people that don’t even claim their homestead exemption. Our realtor gave us a heads up that we would have to renew the homestead exemption in our names for the house, but apparently that’s not the norm because some of our neighbors don’t have it, even though they clearly live in their house all year round.

  • Very well laid out, looking forward to reading the rest. We’ve had a huge political mess where we live over valuations. It turns out that there’s been some shady things going on surrounding valuations and they’ve gone both ways on it. We’re still waiting to see if there’s going to be any legal action over it.
    John S @ Frugal Rules recently posted..Reader Question: Should I Invest in Mutual Funds or ETFs?My Profile

    • Yeah, there was some fishiness in the RE crash around here where the county appraiser was trying to exclude ALL foreclosures and short sales saying they weren’t “market transactions”. But in many areas those were the only sales that were happening. Excluding them meant there was no market…

      Hopefully your appraiser mends their ways before it takes legal action. That’s what happened with ours.

  • Good job! I can’t believe that the taxed value was almost $100K more than you paid for it. That is insane.
    Holly@ClubThrifty recently posted..How to Save Money in College: The Benefit of HindsightMy Profile

    • It really was – it felt so surreal when we were hemmoraging money fixing up everything that was wrong with the house that the county would say it was worth so much. At the time I joked that if the appraiser really thought it was worth $226K, I’d sell it to him in a heartbeat.

  • Ivy

    We also disputed our property taxes in 2012 and had them reduced by $1000 a year. I think if we had gone to appeal we could have reached $1500 reduction, but the process was so long already, I wasted a day at the court and had to chase the tax assessor multiple times to move the process along, so I didn’t feel like wasting more time. The big factor in winning was that the tax assessor had our square footage measured incorrectly.

    One thing I am curious about – the process differs by state and actually also by county – but does your process allow you to make specific adjustments when evaluating the comps – how to do you know it’s $5K for a Jacuzzi, $10K for extra car in a garage, etc? In our county in New Jersey the comparison is based mostly on age, sq. footage, number of bedrooms, bathrooms and a few other basic things. But unless you hire an assessor you can’t present adjusted comps, so you really have to find very close comparables. And you are only allowed 5 comps, excluding any short sales (btw, I couldn’t figure out how to find out whether something was short sale or not, I couldn’t find it in the public records, so I went to court with 7 comps and they had 3 excluded as short sales, so we ended with 4)

    • I made guesstimates based on the appraisal that we had done when we purchased the house a few months before. In them, our appraiser had used $10K as the adjustment for the extra car, and had used $25K for a pool+jac so I backed out the county appraiser’s $20K for a pool. I figured if that was fine with a bank appraisal, it’d probably be okay to bring them into our valuation.

      There are no formal rules in what you can bring as evidence, which I think is where a lot of people trip up. They think because there’s not a list of things to bring, they can just show up with nothing and say, “It’s not fair! My neighbors bill is lower!”

      As for the number of comps, because there’s no formal rule, we’re not limited to anything other than what’s “reasonable”. I went back a year and picked homes that were as comparable as possible in that time period. At the time we were doing this, the appraiser was trying to exclude all foreclosures and short sales, and that was part of the problem. When you excluded them, there was virtually no market. So most of the ones on my list were foreclosures. But they were still market sales, since most (like ours) sat on MLS for months before being purchased. Yes, the seller was a bank. But they were advertised just like any other arms length transaction.

  • Wow, that is quite the reduction. I have never heard of anyone getting anywhere close to that kind of break here. Plus, most of the time the assessment just goes right back up the following year. A family friend bought a foreclosed house a decade ago, that was missing things like front steps. When she challenged, it saved her about $100 in taxes and then the inflationary increase plus her improvements took her right back to the same assessed value the next year.
    Anne @ Unique Gifter recently posted..Taking a Carriage to the Ball (aka Transportation Savings)My Profile

    • Part of the homesteading process here in FL means that once you are homesteaded, your taxable value can’t increase more than 3% per year. (That’s not the same everywhere, but I have heard of similar provisions elsewhere.) So getting locked in at a lower taxable value early in the process means your 3% increases are applied to that smaller number, instead of a much bigger number. So long term, the savings from making sure you’ve got the lowest fair valuation you can get can be huge.

  • GREAT post! I’ve been wondering about how to do this with my own property taxes–now that I’ve refinanced, I don’t really care about the appraised value because I intend to hold the property. Although saying this makes me wonder if city appraisals and bank appraisals are different? So much to learn! :)
    The Happy Homeowner recently posted..Renovate and Organize Your Home Office on a BudgetMy Profile

    • In theory, the city appraisals and bank appraisals would be the same, but in reality, they’ve got very different motivations. The city wants it as high as possible for tax purposes, whereas the banks lately seem to be erring on the lower side. (This wasn’t the case in the boom…)

      There’s also the varying dates… your tax appraisal wants to find out the value on a specific date (probably the previous Jan 1), but the bank wants to find out the value TODAY. Banks would probably also include foreclosures and short sales in any true appraisal because they are more likely to recognize the validity of those as sales, where the tax appraiser is going to want to try and exclude them to increase his value.

  • You really did your homework! When I bought my last property, I saw that I was paying more than my neighbors, for roughly the same apartment size, except I had 3 rooms and they had 2. I sent the plans to prove surface was similar, and their sales price, that was about it, they didn’t lower it as much as the neighbors but I won some. The risk was that they could have upped the neighbors’ rates instead, way to start a relationship!
    Pauline recently posted..13 money resolutions for 2013: #9 max it out!My Profile

    • Yup, it was definitely some homework, but worth it in the long run.

      Glad that you got at least a partial win on your challenge. Was it really a risk that they would have upped the neighbors? I’ve never heard of a challenge here triggering a look again at the neighbors’ valuations. I guess unless it came to light that the neighbors property was misdocumented…

  • Our appraisals have been pretty fair, and our property taxes are very low compared to many parts of the country. I would certainly challenge it if I felt we were over appraised. I like the determination and details you obviously put into this. Can’t wait for part 2!
    Kim@Eyesonthedollar recently posted..My Child Needs Glasses, Now What?My Profile

    • Oh I was totally determined. I felt like we were hemmoraging cash from every orifice and Mr. PoP was working for minimum wage. That money was already allotted for shingles for the roof! =)

  • I don’t know anything much about properties in the USA but in Canada they are valued through MPAC and the city decides your taxes. You can fight them as well and many do. I think your post will be very popular and help those that are struggling as they are in the same situation and will appreciate this. Mr.CBB
    Canadianbudgetbinder recently posted..A Personal Story:Chores and Money Lessons Growing UpMy Profile

    • I hope it does help people as I think there are many that never look at it, especially when it gets wrapped into your mortgage escrow bill.

  • Looking forward to reading the rest of the series. Our taxes are out of control, but sadly they are basically in line with what everyone else is paying. I look at what my parents pay in taxes for a home 3 times the size of ours and they pay a quarter of what we pay. Oh the joys of living in the big city.
    KK @ Student Debt Survivor recently posted..Being “On Call” On Holidays: An EpiphanyMy Profile

    • NYC, right? I hear taxes there are crazy mixes of over and underpayments because of weird exceptions, and loopholes, etc. That would annoy me, I think.

  • Wow! I never knew you could fight back against the man. I will admit I am not well versed in real estate but the property taxes in our county are ridiculous as well. I will take a look and see how much we are paying. Thank you for this information as I have never seen it before anywhere else on the web, definitely a gold nugget!

    • Definitely look into it. And call your local property appraiser’s office and ask to speak with the person that calculated your appraisal. They should be able to have a conversation with you about why your home is valued the way it is and explain the rules that your county uses.

  • Really nice work on fighting the Borg! I’ve had to fight the Borg every year for five years. They’ve always backed down. They are counting on folks not to though, which is why they will always get more on average than they should!

    Financial Samurai recently posted..Why Are Rental Property Mortgages More Expensive Than Primary Home Mortgages?My Profile

    • Not to spoil too much from tomorrow’s post, but winning is apparently pretty unusual in our county unless you hire a RE lawyer. So many people go in with arguments like “but my neighbor pays less!” and nothing else and are shocked when they lose.

  • I love this post. Winning by spreadsheet. LOVE it.
    Kathleen, Frugal Portland recently posted..Save now, spend later (plus $100 giveaway)My Profile

  • Wow I never even knew you could fight things like this. But it’s good to know that you can and thanks for the tips!
    Harry @ PF Pro recently posted..Save $500 on a New iPhone 5 Through Walmart/Straight TalkMy Profile

    • Yeah, I think stuff like this is one of the big reasons I’m a huge advocate for understanding what your home value is even if you’re not planning to sell anytime soon. It makes me nerdy, but it also saves us some big bucks, so I’m okay with it =)

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