How to Protest Property Taxes and Potentially Save Over $500 Annually

Homeowners can potentially reduce their property tax burden by hundreds of dollars per year by formally protesting their tax assessment. A 2024 analysis indicates that over 40% of U.S. properties may be over-assessed, with a median potential savings of $539 annually. This guide explains the property tax appeal process, identifies states where homeowners are most likely to benefit, and provides a data-driven strategy for a successful protest.

What is Property Tax and How is it Calculated?

Property tax is an annual levy imposed by local governments (city, county, and/or state) to fund essential services like public schools, road maintenance, and police and fire departments. The tax is calculated using two key figures: the assessed value of your home, which is the dollar value assigned to your property by a government assessor for tax purposes, and the local tax rate (often called a millage rate).

The formula is straightforward: Assessed Value x Local Tax Rate = Annual Property Tax Bill. Therefore, if you believe your home's assessed value is unfairly high compared to similar nearby properties, you have grounds to file an appeal.

Which States Offer the Highest Savings from Property Tax Protests?

According to the analysis, homeowners in certain states have a greater probability of achieving significant savings through a tax protest. The top five states with the highest share of properties that could benefit are:

• Texas
• South Dakota
• California
• Iowa
• Illinois

The potential for savings is particularly pronounced in "relatively high-tax states" like Texas, California, and Illinois, where even a small reduction in the assessed value can lead to substantial financial relief. In states like California, which has an annual assessment value increase cap (a limit on how much the assessed value can rise each year), variations between similar properties can create more opportunities for a successful appeal.

How Can You Build a Case for a Property Tax Protest?

The most effective method for protesting your property tax is to build an evidence-based case demonstrating that your home’s assessed value is inconsistent with the market. This involves a comparative market analysis (CMA), which compares your property to similar, or "comparable," properties in your immediate area.

A strong appeal should include data on:

• Comparable Sales: Recent sale prices of homes with similar size, age, and features.
• Assessment Values of Neighbors: The assessed values of comparable homes that have not recently sold.
• Documentation of Issues: Photos or reports detailing any property defects that may lower its value.

Based on our experience assessment, utilizing a data-driven tool that automatically compares your assessment to similar properties can provide the concrete evidence needed to support your claim with the local assessor’s office.

What is the Step-by-Step Process for Filing an Appeal?

The appeal process varies by jurisdiction but generally follows these steps:

1. Review Your Assessment Notice: Carefully check the annual notice you receive from the county assessor for deadlines, typically a 30- to 90-day window to file.
2. Gather Evidence: Collect data on comparable properties to build your case, as outlined above.
3. File a Formal Appeal: Submit the required paperwork to your local county assessor’s office before the deadline. Many jurisdictions now allow online filing.
4. Present Your Case: You may have the option to present your evidence informally to an assessor or formally before an appeals board.

It is critical to act promptly, as missing the filing deadline will void your appeal for that tax year.

Key Takeaways for Homeowners

Protesting your property tax assessment is a practical financial strategy. To maximize your chances of success:

• Understand that over 40% of homes may be eligible for a tax reduction.
• Focus your appeal on demonstrating that your assessment is higher than similar properties.
• Act quickly upon receiving your assessment notice to meet strict filing deadlines.

By taking a systematic, evidence-based approach, you can ensure you are paying only your fair share of property taxes.