Personal Property & Real Estate Property Tax Appeals Process
Throughout the United States, every taxing jurisdiction uses different language for the process of disagreeing with the assessed value of property. Some jurisdictions call it a property tax appeal. Others call it a property tax protest.
These two processes are often treated in a similar manner, but the terminology changes by state. For example, in Kansas, it is commonly referred to as a property tax appeal. In Texas, the process is commonly referred to as a property tax protest.
For business owners, commercial real estate investors and property managers, understanding the appeal process is important because assessed values are not always accurate. When a property is over-assessed, a formal review may help reduce unnecessary tax liability and correct valuation issues.
A property tax protest can help property owners challenge an assessment that does not reflect fair market value, asset condition, depreciation or jurisdiction-specific valuation rules. The process requires deadlines, documentation and a clear argument supported by evidence.
Business Personal Property
Determination of Filing an Appeal or Protest
After receiving a notice of value, a taxpayer or their representative will decide if they want to file a property tax protest on their account. This process will be the same for both personal property tax and real estate tax.
For business personal property tax, renditions are required to be filed annually with assessing jurisdictions. If these are not filed each year, assessors can place arbitrary assessments on the account.
In most cases, the acquisition date and cost of the assets are used to place the assets on depreciation tables to account for the loss in value as the assets get older. As assets depreciate differently, these tables often account for the loss of value at different rates.
The calculation of this value, plus inventory or supplies if taxable in the jurisdiction, is how appraised values are calculated for personal property taxes.
A business should consider reviewing its assessment when the reported value does not match asset records, when disposed assets remain on the tax roll or when a jurisdiction applies depreciation in a way that appears inconsistent with the property’s actual value.
Property Tax Appeal or Protest Process with the Assessor
Once you or your designated agent have decided to appeal your value, each jurisdiction has a process to follow. Pay attention to deadlines and the procedures for your particular jurisdiction.
With your Notice of Value, there is typically an appeal form that needs to be filled out. If there is not a form, you can send in a letter or file the appeal on the jurisdiction’s website if that option is available.
Some jurisdictions ask that you provide documentation to support the value you are requesting before the hearing. If the information has been requested, the assessor or board may be willing to work informally to resolve the discrepancy before the hearing.
Documentation may include depreciation schedules, asset lists, appraisal reports, market data, comparable sales, photographs, income information or other evidence that supports the requested value. The stronger the documentation, the easier it is to explain why the assessment should be reviewed.
For businesses managing asset-heavy filings, a property tax audit may also help identify records, classifications or value issues before they become larger appeal problems.
Determination of Who is Correct
Because the state or county assessor is a government employee, it is often assumed that they are following state statutes or guidelines regarding general valuation. Assessors may also believe they are correct in their methods.
This is not necessarily always the case. PVS has developed multiple revaluation methodologies for assets to reduce clients’ property taxes.
That being said, solid backup data, research and sometimes legal arguments by experts are needed to support and defend value calculations. Without a strong fact-based argument, the board may ultimately side with the assessor.
If the discrepancy cannot be resolved informally, then you will want to attend the hearing to present your case. Once you have presented your case and the assessor has presented theirs, the board will either issue a ruling at that time or wait until after everyone has left to determine the outcome.
Once the outcome is determined, a notice will be issued to the taxpayer or tax agent regarding the case.
If the board does not side with the taxpayer, there is usually another step that can be taken. This step usually involves going to the State Board of Equalization. At this stage, most of the time an attorney must be hired.
Real Estate Property
Almost all states across the country that impose real property taxes have a legal process in place for taxpayers to keep real property assessments aligned with the market. These assessment appeal processes are almost always annual and typically do not require use of an attorney at the first stage.
It is recommended that taxpayers utilize industry experts such as property tax consulting firms since property tax consultants have a great deal of expertise and resources at their disposal to combat erroneous property tax assessments.
For commercial property owners, a commercial real estate property tax appeal guide can help explain how valuation evidence, income data and market conditions may support an appeal strategy.
Determination of Filing an Appeal or Protest
Property tax assessments are often viewed as set in stone or predetermined, which can make taxpayers feel the outcome is out of their control.
Assessors in towns and counties across the country are widely presumed to be correct in their valuation of real property. Property assessment laws are generally written with the assessor’s presumption of correctness as a starting point.
Tax assessments are supposed to reflect the fair market value of one’s property. The market value of your real property is constantly in flux due to sales, changes in rental rates and changes in construction costs.
For this reason, your real property assessed value should be monitored regularly. When was the last time you reviewed your property’s tax assessment?
If the assessed value appears too high, a review can help determine whether the property’s condition, income performance, market data or comparable sales support a lower value.
Real Property Tax Appeal or Protest Stages
The real property appeal process varies from state to state, but in most cases, there are three main appeal stages: informal negotiations, board of review and litigation.
Just as with business personal property appeals, there are deadlines to be mindful of when filing a protest of your real property assessment.
Many taxpayers can find success at the informal level when being proactive and reaching out to their local assessors. If assessors begin to dig their heels in and decline to alter their assessment within the taxpayer’s requested valuation range, states typically have a process in place to have the appeal reviewed by a third party.
This secondary appeal stage consists of either a hearing officer or a board of review composed of multiple members.
Hearing officers and Boards of Review or Equalization do not always look at evidence as impartially as they should. For this reason, states have a third level of the appeal process established, which generally requires engaging an attorney who specializes in property tax litigation.
A cost-benefit analysis should be run when considering the litigation stage of a real property assessment appeal due to the costs involved with this extra stage. Not only are legal fees required, but this stage will most likely require a full appraisal report to sway the opinion of the court.
The litigation process for real property tax appeals can sometimes take years or even longer to resolve in certain instances. If the original assessment is far enough out of line, however, most will find that seeing the assessment appeal all the way to the end is worth the additional legal fees and appraisal costs.
What Evidence Helps Support a Property Tax Appeal?
Evidence is one of the most important parts of a property tax appeal or protest. A taxpayer must show why the assessed value should be changed and why the requested value is more accurate.
For real estate, evidence may include comparable sales, income statements, rent rolls, appraisal reports, photographs, repair estimates or market studies. For business personal property, evidence may include asset listings, depreciation schedules, acquisition costs, disposal records and documentation showing how assets are used.
The right evidence depends on the property type, jurisdiction and reason for the appeal. A commercial office property may require different support than a hospital, warehouse, retail center or business personal property account.
When evidence is organized early, the appeal process can move more smoothly. It also gives property owners a stronger position during informal discussions, board hearings or further appeal stages.
When Should a Business Consider a Property Tax Protest?
A business should consider a property tax protest when the assessed value appears higher than the property’s supportable value. This may happen when market conditions change, income declines, property condition worsens, depreciation is not properly reflected or asset records include outdated information.
A protest may also be appropriate when a property has unique characteristics that standard assessment models do not fully capture. Specialized commercial properties, healthcare facilities and large business personal property accounts often need deeper review because their values may depend on use, condition, equipment mix and jurisdiction rules.
For businesses that may have missed an earlier appeal opportunity, property tax second-chance appeals may also be worth reviewing. These situations can reveal whether a correction path is still available after a missed deadline or prior filing issue.
Let PVS Assist With A Personal Property Or Real Estate Tax Appeals Process
Whether we are discussing real estate or business personal property, the bottom line is the same: do not assume that the values placed on your property and the corresponding property taxes are accurate.
These values are often computer calculated with limited information involved. Reputable property tax firms can help review assessments, develop valuation arguments and determine whether an appeal or protest is appropriate.
PVS has been cultivating and implementing valuation methodologies, developing relationships with assessors and working to reduce clients’ property tax liability for decades.
There is something you can do about high property taxes, and we can help.
Frequently Asked Questions
How can I determine if my property is over-assessed before starting an appeal?
You can compare your assessed value with recent sales of similar properties, review your jurisdiction’s assessment records for errors, and consult a property tax professional for an independent valuation.
What types of evidence are most effective in winning a property tax appeal?
Commonly accepted evidence includes recent comparable sales data, independent appraisal reports, depreciation schedules for business personal property, and photographs documenting property condition issues.
What are common mistakes that cause property tax appeals to fail?
Frequent issues include missing deadlines, providing incomplete documentation, misunderstanding jurisdictional filing requirements, and failing to present a strong, fact-based argument.
What is the difference between a property tax appeal and a property tax protest?
A property tax appeal and a property tax protest both refer to the process of challenging an assessed property value. The difference is often terminology. Some states use “appeal,” while others use “protest,” but both processes generally involve filing by a deadline and providing evidence.
When should a business file a property tax protest?
A business should consider filing a property tax protest when the assessed value appears too high, asset records are incorrect, depreciation is not properly reflected or market conditions no longer support the current value. The decision should be made before jurisdiction deadlines pass.
Can business personal property be appealed?
Yes. Business personal property can often be appealed when the assessed value is inaccurate or unsupported. Asset classification, acquisition cost, depreciation schedules, disposal records and taxable status may all affect the appeal argument.
Do commercial real estate owners need a property tax consultant?
Commercial real estate owners may benefit from a property tax consultant when assessments are complex, values appear too high or large tax savings may be possible. Consultants can review valuation evidence, jurisdiction rules and appeal strategy before deadlines pass.
Whether we are discussing real estate or business personal property, the bottom line is the same: do not assume that the values placed on your property and the corresponding property taxes are accurate.
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