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If you care about your property tax bill, you should pay attention to your house's property valuation.
Your valuation is half of the equation that determines your annual tax bill - and it's the key reason you'll pay more, less or the same as your neighbor.
A valuation is supposed to reflect the actual value of your house. It's multiplied by your area's property tax rate to produce your tax bill for schools, city and county government and other taxing entities.
Fair and accurate valuations assure that everyone pays property taxes in proportion to their property's value. The tax system's fairness breaks down when property valuations are out of whack.
County assessors set property valuations, which can be adjusted annually to reflect changes in individual properties and in the housing market. If someone renovates a dilapidated dwelling, the valuation usually goes up. If house prices slump, valuations might go down.
Many valuations are fairly close to true market prices. But a substantial number are not.
That's because county assessors are only estimating your house's value. In fact, unless the house has just sold, no one - not even you - may know exactly what it's worth. In addition, the county's appraisers lack detailed knowledge of your house's strengths and flaws.
The assessor's staffers usually haven't been inside your house, so they don't know about that fancy granite countertop - or the crack in your basement wall. Instead, they make valuation estimates using mass appraisal methods, relying heavily on computer models that take into account your house's general characteristics and sales trends over the past few years.
In practice, those methods don't produce perfect accuracy for individual houses. While the State of Nebraska calls for valuations to fall between 92 percent and 100 percent of market value, counties can pass muster with the state if the average house in a particular area fits into that range - even if many properties miss the target.
Your valuation should be accurate and fair. Accuracy means the valuation should be close to what your property is worth. Fairness means the valuation should be similar to comparable houses.
If your house sold recently for less than the current valuation, you have some evidence it's being valued too high. The same is true if your house is valued higher than similar houses nearby.
Other protests can be based on things you know about your house. A house might have hidden flaws or need repairs. Or the assessor's valuation might be based on incorrect information, such as the home's size or features.
In comparing houses, you should dig deeper than house style and square footage alone. Many factors go into a house's value: objective details such the number of bathrooms and size of the garage, and subjective qualities such as the condition of the house and the quality of construction. Take those things into account in selecting comparable properties for a valuation protest.
Protests may be filed with the county Board of Equalization during June. You can protest whether or not your valuation was increased this year.
Don't expect to win with a general rant about high property taxes or an emotional plea that you can't afford taxes on an increased valuation. You need evidence that the valuation is wrong.
You can buy a custom report showing comparable properties near your home. If your valuation is too high, these comparisons could help you make a case for lowering it.
Our comparison engine looks for similar homes based on valuation per square foot and recent sales in nearby areas. It also looks for market trends that could benefit a protest. We'll send you a list of the best comps to help you get a reduction.
The report costs $19.95. A sample report and a summary of your own report are available before you buy.Learn more
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