Real estate analytics firm CoreLogic recently published a report revealing that property taxes on the median single-family home in the U.S. have risen by over 25% since 2019. During the same period, Federal Reserve data shows that the average sales price of these homes has increased by more than 33%.
Higher home prices may lead many homeowners to believe their increased property tax assessments are justified. However, property tax assessments are not appraisals that reveal a property's actual value. According to Debbie Loesel, a Senior Tax Manager at Deloitte, tax assessments aim to capture fair market value at a specific point in time, expressed as a mill rate.
Mill rates are determined by local governments as part of their annual budget process, dividing a city’s or county’s budget shortfall by an estimate of the value of real property in the jurisdiction and then dividing that number by 1,000. Colton Pace, co-founder of Ownwell, explains that a mill is one one-thousandth of a dollar, translating to $1.00 of tax for each $1,000 of assessment.
Mass appraisal techniques are generally used due to the volume of property subject to assessment, according to Loesel. This can lead to inaccuracies, as noted by Ownwell's Pace, who emphasizes that the value on an assessment notice is an opinion, leaving room for errors.
To lower property tax bills, homeowners should first understand the variables that go into assessments. Sales comparisons are commonly used but can be imprecise. For instance, two homes next door to each other can have significant differences that a typical tax assessment system might not capture.
Professional assistance is advisable for appealing an assessment, although hiring a local real estate attorney can be expensive. Firms like Ownwell can help decipher the complexity of an assessment and analyze properties to identify opportunities to reduce tax bills without upfront fees. Ownwell only gets paid if its analysis results in tax savings, making the service accessible to more homeowners.
Operating in states like California, Florida, Georgia, Illinois, New York, Texas, and Washington, Ownwell combines proprietary technology and local knowledge to build a strong case for tax reduction. The company manages the entire process, including paperwork, discussions with local assessors, and attending appeal board hearings. When successful, Ownwell's fee is a portion of the homeowner's savings.
Ownwell has secured tax reductions for 86% of its users, with average savings of about $1,150. Importantly, customers are not charged unless the taxing authority provides signed documentation that the property tax bill is reduced. If there is a risk of a tax increase, Ownwell will not pursue an appeal.
Registering on Ownwell's site takes approximately three minutes. Entering a property address reveals potential tax savings and ways to save on other homeownership costs. According to Pace, Ownwell's mission is to make real estate costs clearer and more equitable.
Homeowners can also check their county tax assessment website or visit Ownwell.com for a free estimate and to find potential exemptions.
