How to Reduce Your California Residential Property Taxes
by
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10 steps for an effective formal hearing:
1. Bring the correct materials - Property Information and Copies
You must follow the procedures for each county and bring the correct materials. Review the requirements at the clerk of the court or assessment appeals board web-site, in advance. In most cases, you will need at least five copies of the appeal and supporting evidence to distribute to the board. Supporting evidence should include: appraisal style computations, pictures, receipts and details about comparable homes.
2. Be on Time
Arrive to the hearing early. You will not know when your case will be called, so it is a good idea to be on-site and in the room. While waiting, learn from the other presentations and mentally practice your presentation.
3. Dress Professionally
For a male, wear a suit and tie; and for a female, wear a jacket, slacks or conservative skirt. The board and assessor will also present themselves in this manner.
4. Be courteous
Show respect to the board and the assessor. Start with thanking the board for the opportunity to present your case and thank the assessor for the opportunity to present, as well. While these statements are not required, they may set you apart from other representatives and homeowners and soften the adversarial nature of the hearing.
5. Summarize your Case
At the appropriate time, present a succinct overview of your case and the reasons why the value should be reduced for property tax purposes. You should not ask for a reduction of your property taxes. An appeal is not about emotions or complaints about the amount of property taxes you pay. Don’t talk about unjust city services or how unfair the property tax system is to you. The property tax appeal should focus on the value of your property.
Your overview should be similar to an essay introduction. For example, “The home is located at 555 Ocean Drive, Huntington Beach and is currently assessed at $800,000. I’m requesting a property tax reduction of $300,000 to $500,000 based on the average sales price of three comparable homes sold between November 1st, 2008 and March 8th, 2009. In addition, there are three notable reasons why I am requesting this reduction:
1) This home is in poor condition when compared to other homes sold in the neighborhood and required $100,000 in repairs; 2) the home is located on a busy street where buses pass every 15 minutes; and, 3) the home is on a small lot making it less valuable than comparable homes.” 6. Review Workbook and Evidence
After your overview, continue your discussion by walking the board through your supporting workbook. Always use good eye contact and friendly glances to the assessor, take your time and speak clearly. Be sure to give the board time to review the materials before you describe the specifics, keeping in mind the board did not have your material in advance of the hearing. Also, try and monitor the board’s behavior and gestures during your overview. You may be asked questions, showing that they are interested and impressed with your presentation and want to hear more. Your credibility requires honest responses.
If you are aware of facts working against you, consider addressing them before the assessor addresses them. For example, if your home has a large lot, you might concede this but mitigate the damage by presenting some negative information about the extra land. The facts might reveal that the extra 5,000 square feet on the lot is on a slope, limiting its usefulness.
7. Defense
Prepare an offense and a defense for your appeal. For example, if the assessor mentions a comparable home with a much higher price, this is your opportunity to counter and damage the assessor’s case. With advance research, you might contend, “It is true there was a home sold for $1,000,000, but this home was completely remodeled from the ground up two years ago with new construction.” Or, “It is true that the comparable home is nearby, but that home has an ocean view. It’s unclear to me, why the assessor has chosen a home like that to compare to my property?” The more off-base the assessor’s comparable sale is to your property, the greater opportunity you have to bolster your case and elevate your stature before the board.
8. Be Professional
When the assessor is presenting a case to limit your property tax reduction and asks you pointed questions, stay relaxed. Remain calm and professional and focus on the evidence. Wait for the appropriate time without interrupting the assessor, and then address the board with your conflicting objective evidence. The board will take note and may favor you, particularly, if the assessor is agitated and emotional.
9. Have Options
If you’ve prepared a compelling case and you know that there are other alternative results, you should be prepared with alternative computations. If the board is going against you, you may say, “I have prepared an alternative analysis for the board taking into account the higher priced home in the neighborhood."
Pass out copies of the alternative presentation. You may say, “It has occurred to me that the assessor might factor that property into the comparable sales computation. I have prepared an analysis including this home with three downward adjustments reflecting the differences between that home and my home.”
10. Summary and Conclusion
Conclude with a short summary of your case. This is a restatement of your introduction modified by the events of the hearing. Conclude by thanking the board for the opportunity to present your case to them and also thank the assessor.
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About the Book
If you're going to prepare a California residential property tax appeal because of the decline in value of your home or investment property, then you will benefit from the practical guidance in this book.
1. No other book focuses exclusively on how to reduce your California real property taxes due to the decline in market value.
2. While helpful, state and county guides do not provide advice on how to minimize your property tax bill.
3. This book explains the advantages and disadvantages of using the informal versus formal appeal process.
4. Nowhere else will you find practical guidance on how the system works, and what specific steps you should take to reduce your property taxes in California.
5. We'll take you behind the scenes at the assessment appeals board hearing so you'll know what to expect and how to present a winning case at the hearing.
About the Author
Jeffery Morris is managing partner of Morris & Company, LLP, a CPA firm focused on state and local tax and corporate tax services. He is also president of Appealfast, LLC, which offers property tax appeal software to accountants, attorneys and real estate professionals. Mr. Morris previously served as a 15-year Tax Partner with a “Big 4” accounting firm, KPMG, where he was the leader of the state and local tax practice in the Pacific Southwest. Mr. Morris has also served as adjunct professor at USC, CSUF and Golden Gate, where he was honored as “Instructor of the Year.” Mr. Morris frequently publishes articles on property taxes and other federal and state tax issues. He also operates a consumer property tax automation site, CaliforniaPropTaxAppeal.com.