Improving Your Chances of Winning Your Assessed Value Appeal
Kevin Best
Chief Deputy Assessor,
Spokane County
by Kevin Best
Chief Deputy Assessor, Spokane County
The Appraisal Process
Before I explain how to improve your chances of winning your appeal, it’s important for you to have a basic understanding of our tax system and the mass appraisal process used to value property for tax purposes. So here goes. Our county is divided into hundreds of statistical areas commonly referred to as neighborhoods. Also, as an annual county, we revalue all properties every year. For residential properties, we use the depreciated replacement cost approach. Replacement cost is determined by a property’s characteristics (age, size, quality, condition, etc.) and cost tables. The cost tables we use are updated by our software vendor using a nationally recognized provider. So every year, for every residential property, a depreciated replacement cost is determined. Using this methodology, similar houses will have similar values. Once established, the depreciated replacement cost is adjusted to market value based on the sales data in each statistical area. Land values are determined by sales in each area. However, if there are no land sales, land values are assigned based on improved property sales.
The valuation timeframe for assessors is determined by Washington law. The annual appraisal date is January 1st. Mass appraisal is a method to revalue all property in a county without inspecting the property and without using individual comparables for each subject property. Here is a very important point concerning the difference between mass appraisal (which we use) and fee appraisal (which realtors use). In mass appraisal, a limited number of sales are correlated to thousands of properties. In fee appraisal, multiple sales are correlated to one subject property. Assessed values are primarily influenced by sales of property in the preceding year. For example, 2009 sales are the primary sales used to establish values on January 1, 2010 which is for 2011 property taxes. Assessment notices indicating the Jan 1 assessed value are mailed on or about June 1st. Typically, during this six-month period real estate values are flat or appreciating which means by June there is little change in real estate values or property is now worth more. However, this is not always the case in the current real estate market.
When you receive your assessment notice you'll see several values, a land value, an improvement value (meaning anything other than land), and a total assessed value. The total assessed value is the only value you can appeal. Washington State Law does not permit property owners to appeal the land value only or the improvement value only. Finally, the law assumes correctness by the Assessor and the burden to prove otherwise is upon the property owner. Often times the first question we ask of someone who is considering appealing their assessed value is, "Can you sell your property for at least as much as the assessed value?" If the answer is, "Yes," then your chances of winning your appeal are nearly zero.
Appeals Statistics
In 2006, 1687 property owners (appellants) appealed their assessed valuation. Of these, 363 withdrew their appeal, 919 stipulated to a new value, and 405 were heard before the Board of Equalization (BOE). Of the 405 hearings, the BOE sustained the Assessor's value in all but 17 of the appeals. In 2007, 2023 appellants appealed their assessed valuation. Of these, 480 withdrew their appeal, 715 stipulated to a new value, and 828 were heard before the BOE. Of the 828 hearings, the BOE sustained the Assessor's value in all but 38 of the appeals. At the end of this article, I’ve attached the Board Orders from these hearings so you can read why the Board ruled in favor of the appellants. Most appeals are filed as a protest against rising valuations and the appellant does nothing to win the appeal. The majority of appellants don't even show up at their hearing and the board wastes considerable time and money processing and scheduling fruitless appeals. If you really want to improve your chances of winning your appeal, you will need to provide "clear, cogent, and convincing" evidence that the Assessor has erred. The Assessor's website provides all the information you need to prepare a well documented appeal at www.spokanecounty.org/assessor. Of course, you may seek and provide any additional resources that bolster your argument.
Understanding Washington State Law
It is important for you to understand that Washington State Law does not allow the BOE to consider certain conditions as a matter of revaluing your property. Here is a portion of the opening statement you'll hear at the BOE outlining these provisions: Under Washington law, you must prove that the Assessor's value is not the true and fair market value (RCW 84.40.0301). Assessments of other properties, the percentage of assessment increase, personal hardship, the amount of tax, and other matters unrelated to the market value may not be relevant or sufficient evidence to prove market value.
The Key to Winning Your Appeal
The key to improving your chances of winning your appeal is to provide the BOE comparable sales of homes like yours that indicate the Assessor has your valuation too high. For your convenience, we provide a comprehensive list of sales on our web page at www.spokanecounty.org/assessor. As part of the appeals process, we provide comparable sales that support our valuation. You must provide comparables that support your valuation!!! Our market valuations are based upon sales considered to be "arms length transactions." If the comparables you research and provide are more reflective of the real estate market in your area and they provide clear evidence we have your property valued too high, we will likely stipulate to a new value and therefore avoid the need to go before the BOE. Remember, we are basing our valuation as of Jan 1 of the assessment year using sales from the previous year. Many times, over a year elapses between our assessed value date of Jan 1 and the actual BOE hearing where appellants support their value. In this case, the appellant ends up using a more recent appraisal that is not reflective of the Jan 1 appraisal date we must use. So, keep this in mind. The recent appraisal you present may be better suited for the next year’s assessed value appeal.
The Assessor's goal is to fairly and accurately value all property. If we have it incorrectly valued, we want to correct it.
How to Plan Your Appeal
Now, what should you do when the total assessed value appears to be out of line?
First of all, contact the Assessor's Office. Specifically, contact your appraiser. His/her email address and phone number are displayed on your assessment notice.
If you have clear evidence proving you cannot sell your home for at least the current assessed value, contact your appraiser and review the assessment and property information to see if you can come to an agreement on a new value. If an error has been made in the assessment, the value will be adjusted. This is called, "Stipulating your assessed value." You'll find your appraiser's email address and phone number on your assessment notice. So, what constitutes a valid argument? If we have your property characterized incorrectly in our database, i.e. the wrong number of bathrooms or an outbuilding that is actually not on your property, you may have a valid argument. Remember, we do not normally inspect the interior of an existing home. There may be an interior issue we are not aware of and you may need to provide proof of its existence or you may need to allow us access to verify the issue. If both parties agree to a stipulated value, the Assessor's office will send you the necessary documentation to finalize the new value. Basically, we need signatures to validate this process and it allows us to close your appeal with the BOE.
Contacting your appraiser does not constitute filing an appeal. In order to file an appeal, you'll need to contact the BOE and file a form titled, "Taxpayer Petition to the Spokane County Board of Equalization Review of Real Property Valuation Determination" by the "last date to appeal" indicated on your assessment notice. Here is the link to the petition.
Filing Your Appeal
If your appraiser will not stipulate to a new value and you believe you have clear and convincing evidence that your value should be adjusted:
Contact the BOE and file an appeal. Their number is 477-2250. You must complete this action by the "last date to appeal" indicated on your assessment notice. In all cases, we encourage you to file your appeal with the BOE to protect your right to appeal. Remember, it must be filed by the "last date to appeal" indicated on your assessment notice or by law, you forfeit this right. The BOE is independent of the Assessor's office and they will schedule a hearing and rule on your appeal. Remember, we will support our value with comparable sales, when they exist, and provide them to you prior to the BOE hearing. In order for you to improve your chances of winning your appeal, you'll need to provide sales of comparable properties that support your value or provide other documentation (such as a professional appraisal, pictures of the interior, structural reports, etc.) that support your value.
If the BOE upholds the Assessor's valuation and you still disagree, you may take your appeal further to the State Board of Tax Appeals (BTA). Please contact the BOE for the proper forms to appeal at the next level. Once again, their phone number is 477-2250.
Do Your Homework
Let me restate, the key to improving your chances of winning your appeal is to provide the BOE comparable sales of homes like yours that indicate the Assessor has your valuation too high. Look at sales in your area by selecting the "Sales Search" link in the left margin on our web page at www.spokanecounty.org/assessor to find sales. We will provide you with comparable sales that justify our valuation. You must do the same!!!
A List of Winning Appeals
The following is a list of BOE Orders where the Board overruled the Assessor's value and granted the appellant an adjusted value. We present these so that you may read and know what it takes to improve your chances of winning your appeal. Remember, the Assessor's goal is to fairly and accurately value all property. If we have it incorrectly valued, we want to correct it.
Click here to view 17 winning appeals from 2006.
Click here to view 38 winning appeals from 2007.