The ability of ordinary citizens to obtain affordable assistance in appealing property assessments is being threatened by the commerce department's real estate division and some county boards of equalization, according to the Utah Tax Payers Association.
"The division and the boards of equalization are using the real estate licensing law to reach into the property tax appeal process and prohibit anyone but licensed appraisers from assisting property taxpayers with their appeals," explained Wes Quinton, association vice president. "This means ordinary taxpayers who appeal their property values without hiring an appraiser will be discriminated against."
The association insists Utah must restore taxpayer friendliness in the property tax appeals process.
"Property tax assessment appeals in Utah should not be subject to the real estate appraisal requirements," said Quinton. "In addition, the Board of Equalization should not construct rules which disadvantage property owners who have a legitimate valuation concern."
According to the association, Utah has one of the most restrictive rules on appealing property taxes out of the western states. Most states are much more accommodating to taxpayers in the appeal process.
In appealing their property's value, owners in the past have been free to supply their own evidence of value including comparable sales data. Sales information could usually be obtained from a local real estate agent at no cost.
Now many realtors are reluctant to provide comparable data for fear of being sanctioned by the real estate division for offering an opinion of value.
As it now stands, the Salt Lake County Board of Equalization only allows a certified appraiser to offer an opinion of value for property in the appeals process. If a property owner tries to determine his own property value by showing recent sales of similar properties, the evidence will be weighted much lower and may be discounted entirely, making it extremely difficult to have a successful appeal.
"It seems the whole intent of bringing property tax appeals under the strict regulations that govern bank appraisals is to limit the ability of taxpayers to successfully reduce their property taxes," Quinton said.
"Having to hire a licensed appraiser dramatically increases the cost to taxpayers who have a legitimate dispute on their property's value," says Quinton. "A certified appraisal costs approximately $350 for a home. For a business it can be up to $4,000 or more. Yet a home owner who is over-assessed by, say, $50,000 would only expect a $330 tax reduction with a successful appeal. That is a $350 gamble for a possible $330 return. What's more, even if the money is spent for certified appraisal, there is no guarantee the Board of Equalization will adopt the value contained in the appraisal."
In one example, a home-owner's residential valuation increased by $41,000 this year. (This is $60,000 more than what the owner believes it would sell for.) He had considered filing an appeal, but given the $350 to hire an appraiser, it just wasn't worth the reduction in property tax he might receive.
The taxpayer, who wished to remain anonymous, said, "One must continue to live with the higher taxes because one can no longer have a reasonable, cost-effective way to contest them."
The Utah Taxpayers Association believes language in real estate law prohibiting consultation services by anyone but certified appraisers was intended to regulate the appraisal of property in a purchase or lending transaction, not for property tax appeals.
There is a difference in risk between buying a home and appealing property taxes. One requires a certified appraisal for buyer and lender security, the other requires providing comparable sales data to a hearing officer.
"We still allow taxpayers the right to choose who prepares their income taxes, whether it is themselves, a CPA, or the fire fighter down the street," indicates Quinton. "So why should we restrict property tax appeals to certified appraisers only? Taxpayers would revolt if we tried to say only accountants could prepare your income taxes."
Due to Utah's booming economy, property values are skyrocketing throughout the state and county assessors are working to bring taxable values up to market levels.
As a result, many property owners are experiencing increases in property taxes when they receive their annual notice of property valuation from the county auditor.
The Utah Taxpayers Association urges Carbon County residents to double-check assessed property and follow the designated appeals steps if the charges are inappropriately high.
If the market value listed on the notice is higher than what one thinks their property would sell for, they should appeal to the county board of equalization within 45 days of the date the notice was sent or by the date on the notice.
Obtain a copy of the property tax file from the county assessor and check it for errors. Make sure the property description is accurate. See that the acreage of the lot and the square footage of the building are accurate.
Verify the number of rooms and an unfinished space in the building. Errors which would inflate the value of the property should be identified in any appeal.
Substantiate the value of the property. This can be done with real estate closing papers, a professional appraisal, or values of recent sales of comparable property obtained through a realtor.
Many realtors are willing to provide a computer listing of property sales at no cost in hopes of getting future business. Those who have had their mortgages refinanced recently can submit that appraisal with their appeal.
Submit any errors found during step one and the value established in step two along with the appeal to the board of equalization within the time period indicated on the notice.
In larger counties, individuals will be notified of a specific date and time for their appeal after they submit their request. In smaller counties, the appeal may be heard at the same time the request is made.
Some counties allow taxpayers to mail in appeals and some of these may be decided without a formal hearing- While attendance at the hearing is not required in all counties, the association would highly recommend it, as the taxpayer has the responsibility to present the burden of proof.
When in attendance one can explain why their comparable properties are more appropriate than the assessor's and answer questions about their property and comparables.
There will be three parties at the hearing: a representative of the county assessor, a neutral arbitrator appointed by the county, and someone selected to represent the property owner. It may be the property owner themselves. It is up to the owner to show why their property is not worth what the assessor says it is worth.
This is not the time to complain about high taxes. The only appropriate matter to be considered is the value of the particular property in question.
The assessors representative will show why he feels the property is worth what is shown on the notice. The property owner will have the opportunity to ask questions or make comments about the assessors information.
If the property owner is unhappy with the decision of the board of equalization, they may appeal to the state tax commission through the county auditors office. However, individuals have only 30 days to make the appeal from the date of the board of equalization's decision.
The tax commission will review the record of the hearing, including the property owners information and the findings of the board of equalization- Individuals will be first allowed an informal arbitration forum in which a hearing judge will mediate to see if some common ground can be found and an agreement can be reached. Failing that, the property owner will be given a formal hearing. In both of these settings parties can present the Board of Equalization evidence and add new evidence if they choose.
If a property owner is not satisfied with the decision by the tax commission, they may appeal through the courts.
Once again, an appeal must be filed with the district court within 30 days of the date of the tax commission's decision.