Are Your Property Taxes Too High?
Arizona property taxes are collected by the county in which the property is located, with tax bills sent to property owners two times a year – October and March – and become delinquent in November and May. Many homeowners have their taxes paid out of an escrow account, which is an account their lender keeps on their behalf and by collecting approximately 1/12 of the homeowner’s property taxes each month on top of the homeowner’s principle and interest payment. The assessor determines the value of your property and the county treasurer bills and collects these taxes.
The following are some of the property tax-related terms that a homeowner should be aware of:
Full cash value is used to compute secondary taxes for bonds, budget overrides, special districts like fire or flood control and other limited-purpose districts. The assessor’s office uses a variety of information to determine the full cash value of a home, including previous sales in the neighborhood, square footage and lot size. The full cash value does not take into account specifics, such as whether a home has a new roof or kitchen upgrades. Thus, it may or may not reflect the home’s actual resale market value.
Limited property value is used to compute primary taxes, which go to cities, counties, schools and colleges. It’s calculated using a complex formula set by the state legislature and cannot exceed the full cash value.
Notices of valuation are mailed out in mid February each year. These are not tax bills; they show the values that will be used to determine the following year’s taxes. For example, the valuations received in February 2011 will be applied to 2012 taxes, and those sent out in February 2012 will be used for 2013 taxes.
The Appeal Process
Once the notices of valuation are sent out, residents have 60 days to file a free administrative appeal with the assessor’s office. The appeal deadline date is included on each notice. This year, the deadline was April 21.
The property owner must include in the appeal some type of evidence supporting their argument. Submitted evidence for a residential appeal often consists of the sale price of one or more comparable homes. The owner is also given the opportunity to meet with assessor’s office staff to further discuss the case. Assessor staff also may schedule a tour of the home as part of the investigation.
The assessor has 20 days from the date the appeal is filed to make a ruling.
If the owner is unhappy with the ruling, a free appeal to the independent State Board of Equalization must be filed within 20 days. The property owner may attend the board’s hearing of the case and submit written evidence, but no oral testimony is permitted. The board must make a decision by Dec. 1.
If the resident is unsatisfied with the board’s decision, an appeal to the Arizona Tax Court must be filed within 60 days.
Once the administrative appeal deadline has passed, residents have until Dec. 15 to file an appeal directly with Arizona Tax Court. No attorney is required, but there is a $142 filing fee. The burden of proof lies with the property owner.
If you do not receive a valuation in the mail, contact the Maricopa County Assessor’s office at 391 West Jefferson (602-506-3406). Review the information carefully. Check to see that the square footage, number of bed and bathrooms are correct; it is very common when I am reviewing tax records to find incorrect information. If there is incorrect information, the county may change the assessment without a formal appeal. If your property has been valued incorrectly or classified incorrectly, you may petition the assessor for review within 60 days of the notice date. If the only issue is that you disagree with the valuation, the next step is to gather data.
If you have current appraisals, take a moment to review them. Look at the homes the appraiser used as comparable homes to yours and the value the appraiser gave your home. Ask a real estate agent–who specializes in your neighborhood–to give you a list of homes which have recently sold, in your area that are similar to yours. Compare their current home sales that are similar (comparable) to your home. Compare this value information to the value placed on your home by the assessor. This information will need to be included as part of the appeal process.
The deadline to file an appeal is December 15th of the year the valuation is received. Keep in mind that the valuation you receive is not a bill and does not state the actual amount of the taxes that will be due. It only gives you the information on what value the assessor assigns to your home. Remember, by the time you receive your tax bill it is too late to appeal it. If a recent appeal has been made and denied, the appeal must be filed within 60 days of that decision. The procedures and instructions for filing a small claims property tax evaluation appeal can be found at http://mcassessor.maricopa.gov/Assessor/PropertyValueAppeals.aspx. If the county adjusts the taxes, it can only be adjusted for the year you appealed as the valuation; they will not go back to previous years and adjust.
The appeal process requires three forms:
A cover sheet that includes the owner’s information, names, addresses and county where they live. Also state the fact that you are representing yourself in this appeal.
Your name as the Defendant and the county where the property is located and your signature. The second page contains more contact information and your parcel number. You will place an X on the box that tells the court if the property is your primary residence, a rental or a second residence. Include the value assigned by the assessor and the year assessed.
List the reasons you think the assessed value is too high and then write in the dollar amount you believe it should be. You will need to submit copies of these documents to the clerk of court along with a fee of $142.
Keep a copy for yourself and send three copies to the clerk of the Superior Court with a self-addressed stamped envelope so that they can return a confirmed copy to you. If you do not include the return envelope, you will not receive back the confirmed copy, which acts as proof of your filings.
If your property exceeds $1 million or is not classified as class three residential properties, you must file your appeal in the regular court and it is known as a “Record” Tax Case. In this case, it is more expensive and there is not an approved self-help form available which makes it strongly advisable to consult a lawyer or tax professional.
When to Appeal
If you don’t think you could have sold your home on Jan. 1, 2011, for the full cash value listed on the valuation.
If something is wrong with the information that the county assessor used to value your home, such as the square footage.
If you believe bad “comps,” or sales of comparable homes, have been used to set the value for your home.
It is worth taking the time to review your tax valuation when you receive it is February of each year. If you believe the value is incorrect, contact your real estate information to support your opinion. It is not a difficult process to appeal your taxes and can save you hundreds of dollars.
Written by Carlie Black
Carlie Back is a resident of the South Mountain District and a local real- estate agent with Keller Williams Lifestyle Realty. E-mail her with aques- tions, comments and suggestions at email@example.com