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Appealing Your Property Taxes – What Every Property Owner Should Know

All real property is subject to assessment and taxation on a periodic basis. In Maryland, for example, assessments are performed once every three years and values are phased in over the three-year assessment period. It is not uncommon for values to rise by tens of thousands of dollars per year even in a troubled real estate market. The stated goal of the assessment of real property is to determine its “fair market value,” which is defined as the amount a buyer, willing but not obligated to buy, will pay to a seller, willing but not obligated to sell, in an arms-length transaction. Since by definition the only way to truly determine fair market value is by a sale of the property, unless a property has sold recently the challenge of the tax assessor is to arrive at fair market value using data other than the actual sale price of a property. Assessors do this by examining several factors. In the case of commercial properties, assessors look at the income and expense history of the property, its highest and best use and additional factors such as the replacement cost of the improvements on the property. Residential assessors, on the other hand, are more concerned with the recent sale prices of comparable properties and making adjustments up or down depending upon the similarity of features between the comparable property and the subject property.

In such a system, there is obviously room for reasonable minds to differ regarding the amount to be credited or debited for various features. With commercial properties certain assumptions must be made by an assessor, such as the appropriate capitalization rate to utilize when predicting income potential. In the case of residential properties, the issues involve the amount to be credited or debited for such features as number of bedrooms, number of bathrooms, finished basements, swimming pools, garages and the overall condition of the property. Many property owners find themselves in disagreement with the value placed on their property by the assessor.

Regardless of where your property is located, there are procedures in place to allow you to appeal the assessor’s decision. All such procedures contain deadlines and other requirements for successfully prosecuting a tax appeal and it is easy for those unfamiliar with the process to make mistakes that can prove costly, or even fatal, to the appeal. That is why it pays to consult a lawyer familiar with the appeal process as soon as the assessment notice is received. At P.K. Hammar Legal we have been successfully litigating tax appeals on behalf of property owners for many years. Let us help you avoid the pitfalls common to the property tax appeal process and ensure that your property is not assessed at more than its actual fair market value.

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