Individuals today are being taxed from all angles. We are required to pay income taxes, property taxes, mortgage taxes, sales taxes, “sin” taxes and the list goes on and on. Most people believe that they are powerless to affect the amount of taxes they pay. This article will discuss some basic considerations as to how an individual can reduce the amount of taxes paid. This can be done by checking the assessed value of your home and challenging that assessment if it is too high.
BASIC CONSIDERATIONS
The assessed value of property is determined by the local assessor. The assessor has his/her own method for determining what (s)he feels is the value of your property for tax purposes. This value may be incorrect and reflect a total value which your property does not necessarily have. One reason for this is that assessments can often be several years old. As a result, the assessment does not necessarily reflect changing market conditions or the condition of your property.
How can you tell if your property is over-assessed? One way is to watch for sales of similar property in your area. This lends some guidance as to prevailing property values in your neighborhood or community. The second option would be to have the property appraised by a professional appraiser. It should be noted however, that this can be an expensive process.
You can find out the assessed value of your property from the local assessor’s office. The local assessor is required to file a tax assessment roll with the town clerk every year. For most towns this occurs on May 1st; this date is considered the tax record date. There are two procedures which can be pursued to challenge your assessment if you believe the assessment is overvalued. First is an Article 7 review under New York’s Real Property Tax Law. The second procedure is a Small Claims Hearing.
I FEEL MY ASSESSMENT IS WRONG, WHAT CAN I DO NOW?
You have decided to take action and challenge your assessment. What do you do now? Some property owners will seek to pursue the procedures outlined in Article 7 of New York’s Real Property Tax Law. This is potentially a two-step process. The first step is an administrative ruling and the second step involves judicial intervention. This section outlines the two step process.
First, a complaint must be filed with the Board of Assessment Review. This must be done by the 4th Tuesday in May and should be based upon the grounds that the current assessment is excessive, unequal or even unlawful. The Board of Assessment Review meets on the 4th Tuesday of May to listen to the complaints. The Board will entertain testimony from the taxpayer and the assessor; and each side offers proof regarding their respective positions. The Board then makes a final determination of the assessed value. If the Board rules in your favor, the process is over and your assessment will be reduced. On the other hand, what occurs if you are dissatisfied with the Board’s determination?
By the first day of July, the assessor will complete the final tax assessment roll. A notice of its completion will then be published. The landowner who is unhappy with the Board’s determination may commence an action in the state Supreme Court by filing a petition within thirty days after the completion of the final assessment roll. The petition will not be considered if it is filed more than thirty days after the final assessment roll is completed. The petition should be filed in the county in which the property is located. An attorney should be retained as tax challenge petitions are very technical.
After the commencement of the proceeding, a judicial conference is scheduled at which the judge will attempt to facilitate a settlement. If a settlement is not reached, the judge will require both sides to obtain an appraisal and file it with the court before trial. During the course of the proceeding, the assessment is presumed to be correct. In order to prevail, the property owner must prove by substantial evidence that the current assessment is incorrect. Therefore, the burden of proof is on the property owner and not the assessor. The judge is the final arbiter of the value of the property if a settlement was not reached.
It should be noted that tax assessment cases at the Supreme Court level can take several years until the issue is finally determined. Therefore, the property owner must decide whether to pay the taxes in the interim. If the taxes are not paid, the property could become subject to a tax foreclosure sale. In addition, each year’s tax assessment roll will constitute a new cause of action. Consequently, petitions must be filed every year that the property owner seeks to challenge the assessment, even if a previous challenge is still pending.
IS THERE ANY OTHER WAY?
A second procedure exists to challenge a property tax assessment. This is through the use of the Small Claims Assessment Hearing. The Small Claims option is available if a property owner received only a partial reduction in the tax assessment or no reduction at all in the assessment. This option would be pursued in place of the appeal to the Supreme Court. There are two prerequisites to utilizing the Small Claims procedure. First, you must be the owner or occupier of a one, two or three family home or the owner or occupier of a farm with an assigned homestead lot. The second prerequisite is that the reduction in taxes sought to be paid cannot exceed Seven Hundred and Fifty Dollars ($750.00).
The Small Claims procedure requires a filing fee of twenty-five ($25.00) dollars and the filing of a petition. The petition generally must be filed within thirty days after the final tax roll is adopted and filed. Some jurisdictions also require that a petition be filed with the school district within a specified time period. The failure to do either of these could result in the dismissal of your case. The petition which must be filed is a standard form which may be obtained from places such as the assessor’s office, the County Real Property Tax Service and the State Board of Equalization. New York State has a publication entitled “How to File a Complaint on Your Assessment” which is a useful tool for the mechanical and technical aspects ofthe assessment review process.
The Small Claims Hearing is informal. Generally, the property owner presents his/her case first. The assessor or its representative then has an opportunity to ask questions. The town will then have an opportunity to present its case after which the property owner is allowed to question the town’s representatives. The hearing usually lasts fifteen to twenty minutes.
There are several tips which can be followed to help improve your presentation. First, attach your exhibits, analysis and any other data you will utilize to the petition. If the material is lengthy, highlight the most important information so the hearing officer can easily scan the information before and after the hearing. Also, copies of all material should be brought to the hearing in case additional copies are needed. After the hearing is scheduled, submit a written request for all appraisals and other data which the assessor will use in defending his/her assessment. The information should probably be received five to seven days before the hearing. The request should be made in writing and mailed to the hearing officer, the assessor and the town, village or city attorney. Finally, and most importantly, ensure that your presentation is professional and factual, generally lasting no more than ten minutes. The hearing officer is more likely to respond favorably to this type of presentation than one that is overladen with emotions.
CONCLUSION
Many people are afraid to challenge their property tax assessments. As a result, they resign themselves to a lifetime of paying inflated property taxes. This does not have to be the case. Procedures exist to challenge a potentially faulty assessment. These procedures exist because the ultimate goal is equitable and accurate taxation. The procedure can be lengthy, and there are costs associated with challenging the assessment. Therefore, a property owner should ensure that the property is over-assessed and that the tax savings will exceed any costs before a review is sought. Hopefully this article has taken some of the fear out of challenging an overvalued tax assessment.
In addition, there are very technical rules and stringent time deadlines which must be complied with when challenging an assessment. The time guidelines discussed herein are relatively standard, but deadlines in your individual community may vary. You should verify the necessary filing deadlines in your community if you seek to challenge your assessment.
David Colligan, a member of NYFOA’s Niagara Frontier Chapter, is a practicing attorney with a Buffalo law firm (Colligan Law LLP; 600 Bank of America Building, 12 Fountain Plaza Suite 600 Buffalo, NY 14202) and regularly provides articles on legal matters of interest to forest owners.