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Appealing Property Tax Paid Off

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Over the last three years we have seen our property tax bill increase while the value of our home declined. This is quite common in the US as I understand. In this post, I will talk about how our property tax is calculated and what we did about it.

In Oregon, we see two numbers in our property tax bill.

  • The RMV (Real Market Value) is the estimated value of our home on the previous Jan 1st.
  • The AV (Assessed Value) is the attempt to cap the increase of property tax to 3% each year. Measure 50 was passed in 1997 and since then, the AV goes up 3% every year regardless of what happens in the real estate market.

property tax appeal

The county calculates the property tax based on the lower number between RMV and AV. As you can see the RMV is generally quite a bit higher than the AV.

Like many home owners in the US, we don’t like paying more property taxes every year while the value drops. So we decided to appeal and hoped to bring the RMV down lower than the AV. If we could do this, then our property tax bill will decrease.

I appealed in 2008 unsuccessfully, but I was willing to try again because property value dropped quite a bit since then. I sent in the appeal request along with the property tax payment in November 2010 and waited to hear back. One of our neighbor purchased a unit similar to our condo in 2009 for 30% off our 2007 price (near the peak of course.) Eventually I got my appeal date in March and prepared to battle those blood sucking city workers.

I walked in to the meeting room to face the appeal board that consisted of 3 nice volunteer retirees and home owners just like us. I knew this from 2008, but I wanted to throw in “blood sucking city” for fun. I sat down and presented my data and…. The board promptly told me they have been instructed (by the county court?) to NOT consider bank sales as evidence of lower property values. Wow, really? That statement completely let the wind out of my sail since I only brought the data from the lowest priced sale – a foreclosure.  I went ahead and made my pitch, but I knew the routine from 2008. The 3 people on the board were very nice and explained to me that the assessor office found the RMV to be a bit lower than in the tax statement. The board then voted to lower the RMV and was ratified. This didn’t help me much because the lowered RMV is still higher than the AV. I went home disappointed and received the confirmation a few days later.

However, surprise surprise, the county sent me a $440 property tax refund check last week!!! I deposited the check and I’m not going to ask any questions. This is why we are anonymous. 😀 Hopefully our 2011 property tax bill followed suit and stay lowered too. What can I say, if at first you don’t succeed, try try again. BTW, the $440 is going straight into Baby RB40’s 529.

If you like this post, you might want to check out my Buying a home is better than Renting post.

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{ 15 comments… add one }
  • LifeAndMyFinances April 25, 2011, 3:59 am

    Nice job taking action! There are quite a few people that would have just said, “It is what it is..” and done nothing about it! But, now you are $440 richer because of a short presentation! Nice work.

    • retirebyforty April 25, 2011, 9:44 pm

      I’m afraid they made a mistake somewhere, but I’m not complaining. 🙂

  • Moneycone April 25, 2011, 4:43 am

    Great post Joe! There is always hope! Pleasant surprises like this are always welcome!!

  • Lindy Mint April 25, 2011, 1:32 pm

    Wow, that is so great! I wonder if there is an appeals process in my state hmmm. Our property bill went up and up too, until last year it finally went down and we got a little rebate from our escrow account. We’ll see what happens in the following years.

    Good job for sticking it to those blood sucking city volunteer retirees!

    • retirebyforty April 25, 2011, 9:46 pm

      You should check with the county. I think it’s worth the time because if you get it lowered then it’ll be lower going forward too.

  • 101 Centavos April 26, 2011, 3:58 am

    Well done, RB40. Property taxes are one thing that get my blood boiling. Ours went up automatically last year, without so much as a by-your-leave. Just part of the constant process of strip-mining the citizenry.

    • retirebyforty April 26, 2011, 1:04 pm

      It took me a few years to understand the AV vs RMV, but I guess I’d rather have property tax go up 3% consistently than jumping 20% in one year.

  • Nicole April 26, 2011, 5:13 am

    We’ve contested ours every year. Some years they go for it, some years they don’t. It was easiest the year we’d gotten our home inspected for a refinance. This year Zillow says our home value has dropped 20K after they changed school districts on us (I doubt they were thinking about how much they were destroying home values when they decided to do that). If their figures agree, that’ll cut quite a bit off our property taxes.

  • Money Reasons April 26, 2011, 9:29 am

    A few years back, I was getting ready to battle my city board too, but they adjusted the estimated value of my house down automatically. I felt like the luckiest guy in the world for a second to two, until I realized that they had my blueprints incorrect on the layout of my house (by 100 sq feet). I didn’t feel like saving money, erh I mean fighting the board just then, but now this year (or next) perhaps I will.

    • retirebyforty April 26, 2011, 1:02 pm

      It was pretty easy to go in and talk to the board. They were retirees and will turn you down very nicely, but it’s worth it to try. 🙂
      The time slot is only 10 minutes anyway so it’s quick.

  • everyday tips April 26, 2011, 6:23 pm

    Hey, that is a pretty good hourly rate you made (although I know there was some prep time in there too, but still great money!)

    Our taxes have actually been dropping along with our property values. It took awhile though because our tax increases are limited by something called the Headlee Amendment. So, it there is a time period where there was high house appreciation, it takes awhile for taxes to go down because the taxes were capped. Long, complicated story. Anyway, congrats!!!

  • Melyssa April 27, 2011, 8:51 am

    Wow, great job! And it was well worth it. Lucky for us, they just lowered our property tax by $100 a month. Not sure if this was all of CA or just our county, but I’m not complaining. This definitely helped us.

  • Tax Lien certificates May 10, 2011, 6:59 am

    Generally speaking home equity interest id not tax deductible on your tax return.

  • ross May 13, 2011, 3:57 pm

    I live in california and we have one of the lowest property taxes rates in the country. BUT unfortunately, it’s offset by the fact that we have one of the highest state income taxes in the country.

    They did reassess my property value and so my tax declined along with the value of my house.

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