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Property Taxes Too High? Here’s How to Lower Your Bill
By Leslie Cook MONEY RESEARCH COLLECTIVE
About half of all taxable property in the U.S. is over-assessed. Here’s how to challenge your bill.
Over the last several decades, homeowners have gotten used to paying roughly the same property tax bill every year. An occasional increase wasn’t unheard of, but if your taxes did go up, it was usually pretty insignificant — around 0.5% to 1% on average.
Imagine, then, the sheer panic Chicago resident Darryl Lloyd felt when he opened his 2024 property tax bill and found it had skyrocketed from $1,800 to more than $30,000 — an increase of about 1,500% — in a single year.
Frantic, Lloyd contacted his local tax assessor’s office, which brushed off his concern, according to Fox 32 Chicago. Eventually, the office admitted the bill was based on an incorrect property assessment, which valued his 960-square-foot, three-bedroom, one-bath home at over $1 million. And during the search, the city found an additional 4,400 properties that had also been miscalculated, the network says.
Nationwide, property taxes increased by about 26% between 2019 and 2023, according to data analytics firm CoreLogic, largely thanks to skyrocketing home values during the pandemic. Still, data from the National Taxpayers Union Foundation shows that between 30% and 60% of all taxable property in the U.S. is over-assessed. Worse yet: Only 5% of homeowners challenge the bill, the foundation says.
Most U.S. counties have an on-staff property value administrator (PVA), an elected official who’s responsible for assessing nearly every piece of property within his or her municipality. But this is a massive task, and according to Colton Pace, CEO of Ownwell, a start-up specializing in helping homeowners reduce and appeal their property tax bills, its own the vast majority of tax offices rely on computer-generated algorithms to complete. And if the algorithm makes a mistake, it’s up to the property owner to fix it.
Here’s how to check the math:
Step one: A few months before your tax bill arrives, you should receive an auto-generated property assessment in the mail. (The exact date for both of these notices varies widely by state.) Make sure every physical detail on that document — the square footage, number of bedrooms and age of your house, etc. — is accurate.
Step two: The assessment should also include an approximate value for your home. Was there a significant increase? Does it seem too high? How does it compare with other properties nearby? If you’re unsure, look up the assessed values of your neighbors’ homes online or in person at your county clerk or tax assessor’s office.
Step three: Now it’s time to make sure you’ve received all the tax exemptions you’re entitled to. Most jurisdictions give at least one exemption to every homeowner living there, provided the home is their primary address, but that’s not the only potential write-off. If you’re a senior or a veteran, or have recently made renovations to your home, you may qualify for additional exemptions.
Step four: If you catch any mistakes, find that you aren’t getting a tax reduction you’re entitled to or simply believe the assessment is too high, it’s time to file an appeal. (Pace says some jurisdictions call this a “challenge,” a “protest,” a “grievance” or a “petition.”) Depending on where you live, you’ll have between 30 and 60 days to file, so it’s important to know your deadline and appeal within that time frame. Otherwise, you’ll have no choice but to pay the bill that inevitably arrives.
If you decide to challenge the assessment, prepare to plead your case before an appeals board. Gather all the supporting documentation you can (comparative market analyses, home renovation invoices, etc), and ask a local tax expert to give you the rundown on what to expect at the hearing.
There are companies, like Pace’s, dedicated to finding exemptions, verifying the accuracy of tax assessments, and representing homeowners who aren’t comfortable going to a hearing alone. Whichever route you choose, you’ll need to be proactive—the window of opportunity is usually pretty short.
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Leslie Cook is Money's lead real estate editor, covering news stories about mortgages and how rate movements affect the housing market and writing and editing stories that inform our readers about real estate trends and how they affect homebuyers and sellers. Leslie writes a weekly newsletter, Money Moves, that covers a wide range of real estate topics in addition to her weekly articles. Her work has been featured on Apple News, MSN and ConsumersAdvocate.org. Leslie has been covering the mortgage and real estate industry at Money since 2019 and has interviewed industry leaders, such as Lawrence Yun, chief economist at the National Association of Realtors, and Glenn Kelman, CEO of brokerage Redfin. She has been a guest on the This Morning with Gordon Deal radio show, interviewed by The Mortgage Note, and served as moderator for ServiceLink’s State of Homebuying webinar. While at Money, Leslie has contributed to several of Money’s rating and ranking features, including Best Places to Live, Best Places to Travel and Changemakers. She has also played a major role in researching and selecting Money’s Best Banks rankings for the past four years. Before joining Money as a staff writer, Leslie was a reporter for Caribbean Business Newspaper in San Juan, Puerto Rico, covering human resources, telecommunications and computers. She graduated cum laude from Bryn Mawr College in Pennsylvania with a bachelor’s degree in history. The research and interviewing skills learned there have contributed to Leslie’s ability to provide accurate information on her area of expertise and elicit informative responses from her interviewees.