The Tax Grievance Process: Three Steps to Grieving Your Taxes

If you wish to grieve your property taxes, you need to wait until the municipality publishes the Assessment Roll establishing the Assessor’s market valuation of your property. That will usually be done by the first Tuesday in May for most Hudson Valley towns, and the first Tuesday in June for most of Westchester County. Once you have the Assessor’s market value, you can follow these three steps to grieve your taxes:

  • Step One: Determine if you have grounds for a grievance petition by researching whether the assessor’s determination of your property’s fair market value is accurate.
  • Step Two: Prepare a grievance petition by filling out the Complaint on Real Property Assessment for (Form RP-524).
  • Step Three: Write a letter in support, including any substantiating documentation (such as an appraisal, comparable property information, etc.).

Once your paperwork is complete, you need to submit it to the municipality by Grievance Day, which in most cases is the third week of May in the Hudson Valley, and the third week of June for Westchester.

Below, we will take you through the process of filing your grievance petition.

Step One: Researching Your Market Value

Once you know the market value determined by the assessor, you need to do your own investigation into market conditions to find out if you have grounds for filing a complaint about your assessment. Technically, property owners can make four distinct claims for a grievance, including situations where the property is improperly classified (i.e., it’s not commercial property, it’s residential) or exempt from taxation (i.e., it’s a church or school). But the main grievance situation for most homeowners involves the basic complaint that the property is subject to an “Unequal Assessment” because owners of comparable properties have received lower assessments and thus will pay lower taxes.

Essentially, a claim of “Unequal Assessment” is based on your contention that the assessor over-estimated the market value of your property compared to other similar properties in your local area. If your Assessor over-valued your property compared to the other properties, you’ll have a higher assessment than those other owners, which means you will have an “Unequal Assessment. In order to prove that claim, you need to show that the market value of your property is actually lower than the assessor’s determination.

Here are the most common ways of determining market value.

  • The purchase price of your property: If you purchased the property in the last few years in an arms-length transaction involving a seller that was not under duress, you have a good baseline valuation for the property.
  • An appraisal. If you purchased or refinanced the property in the past few years, you will likely have received an appraisal on the property, which is an excellent baseline valuation for the property.
  • List Price. If your property is currently listed for sale, the listing price can provide evidence of market value (although it is likely that your listed price will actually end up being slightly higher than your market value, since most sellers discount 5-6% from the listed price during negotiations with buyers).
  • Recent comparable sales. If you have access to public records or real estate data, you can look for comparable sales of properties similar to yours to provide a fair valuation of your property. Your Better Homes and Gardens Rand Realty agent can help you gather recent comparable sales by performing what’s called a “Simple CMA” of your property.

For purposes of your research, note that the valuation date for your property – the date for which you should measure the market value – is not the date of your petition. Rather, New York State has a standard valuation date of July 1 of the preceding year for most municipalities. This is actually helpful, because you can limit your research to any sales up to the prior July, rather than have to look at sales up to the minute of your grievance.

If you determine that your property is over-valued compared to similar properties, and compared to the market value determined by the Assessor, you have good grounds to complete a grievance Complaint.

Step Two: Fill out Your Property Tax Grievance Form

You can get the property tax grievance form, otherwise known as the Complaint on Real Property Assessment for (RP-524), online or at your local municipality. The form is mostly self-explanatory, but we will take you through each section to highlight how to ensure you fill it out correctly.

Part One: General Information

The general information section mostly asks you to fill out personal information such as your name, contact information, and the property location. The only information you’ll need to look up is in section 5, which asks for tax map number for the property. You can get that information on your tax bill, or when you look up the Assessment Roll at the local municipality or online. Also, section 6 asks for the assessed value, which you can also get from the Assessment Roll.

Finally, in section 7, you’ll need to put your own estimation of the market value of the property. Note that the market value is determined as of the “Valuation Date” in the municipality, which in most cases is the preceding July 1st.

Part Two: Information Necessary to Determine Value of Property

Part Two is where you can set out the information that you believe supports your grievance argument. You essentially have a number of choices in which to claim that the market value is lower than the value determined by the assessor, and can check off and complete whichever of the choices apply:

  • Section 1: You will fill out Section 1 if you purchased the property within the past few years and believe that your purchase price should be the basis for the revaluation. You’ll note that the form requires you to identify if the seller and purchaser had a family relationship, which would undermine the significance of the purchase price.
  • Section 2: You will fill out Section 2 if you put the property on the market recently. A property on the market for a particular sale price is also fairly good evidence of market value, especially if it has been on the market for enough time to establish value.
  • Section 3: You will fill out Section 3 if you have had a recent appraisal of the property, but you will need a copy of that appraisal. If you do not have one, your mortgage bank or the attorney who handled your sale should have one. A recent appraisal (within the past three years or so) can be very helpful.
  • Sections 4, 5, and 6: These sections generally govern new construction properties or rental properties. If those sections apply to you, then you should complete them.
  • Section 7: This is a catchall for anything else you want to provide in support. If you are providing market information in the form of comparable sales that justify a lower market valuation for your property, then you should check off section 7.
Part Three: Grounds for Complaint

Part Three is where you identify the grounds for your complaint. This can be a bit confusing because of the array of choices in front of you, but for most people reading this, the choice you want to make is to check off Section A.1.a. of the form – Unequal Assessment.

That is, you probably want to claim that the “assessed value is at a higher percentage of value than the assessed value of other real property on the assessment roll.” Essentially, what you are saying is that the assessor’s determination of market value is too high compared to the actual value and the value of comparable properties. That covers most situations in which you think your assessment is too high.

After you check of A.1.a. right at the top of the form, you should also fill out Sections 3 and 4. In Section 3, you’ll put the value that you believe is the market value for your property. The number you put in Section 3 should be the same number that you put in Part One, Section 7.

As for Section 4 (Part Three, A.4), you need to write in the number that you believe should be the new assessed value of the property. There are two ways to do this:

  • First, you can take your market value of the property (the number in A.3), and multiply it by the Uniform Percentage Value that you can find on the Assessment Roll.
  • Second, you can calculate the difference between the Assessor’s determination of market value of the property and your determination of market value, and then calculate that percentage difference off the Assessor’s assessed value for your property.. For example, if the Assessor specified the market value at $400,000, and you believe the market value is $360,000, that is a 10% reduction in the market value. That would also mean a 10% reduction in the assessed value. So if the Assessor’s assessed value is $200,000, that would make your Section A.4 assessed value $180,000 (10% off $200,000 is $20,000).

It may be that you have other grounds for your complaint, so here is a brief explanation of the other sections:

  • Section A.1.b. is for cases where you have recently improved the property through new construction, and the assessor’s valuation of your improvements are too high.
  • Section A.2 challenges the actual equalization rate in the municipality itself, rather than relying upon your determination of market value.
  • Section B is rarely used, because it claims that the assessment is actually higher than the market value. The assessed value is almost always lower than the market value, since the Uniform Percentage of Value is usually about half the actual market value.
  • Section C is used when your property is actually exempt from property taxes because it is an exempt property (e.g., school, church) or is not actually in the jurisdiction of the taxing municipality.
  • Section D is used when the property is misclassified, such as when your property is taxed as commercial property when it is residential.
Part Four: Designation of Representative to Make Complaint

You can fill out this section if you are going to be hiring someone to represent you in filing your complaint. If you hire an attorney, you would fill out Part Four to designate that attorney to act on your behalf.

Part Five: Certification

In Part Five, you certify that everything you write on the form is true and correct to your best knowledge. Making false statements on the official complaint form is a criminal act.

Part Six: Stipulation

Part Six is only used in situations where you and the assessor have come to an agreement as to the assessment of your property, usually as a result of negotiation before Grievance Day.

Space Below for Use of Board of Assessment Review

Do not fill out the rest of the form. It is filled out by the Board of Assessment Review to render a judgment on your grievance complaint.

Step Three: Write a Letter in Support

Neither the state nor most municipalities give examples of how you should write your letter in support of your grievance complaint. In practice, these letters can be anything from a hand-written appeal to a report complete with graphs and charts. Essentially, you simply need to set out your case in clear and concise terms, without worrying too much about the form.

If you want a simple example of what the letter should look here, here is a model:

Board of Assessment Review Town of [town name] [Address]Re: Complaint on Real Property Assessment [Property Address]To the Board of Assessment Review:I write in support of my Complaint on Real Property Assessment for the property at [property address]. My Complaint Form RP-524 is complete and attached.I bring this Complaint on the grounds of Unequal Assessment because the Town Assessor’s valuation of my property is higher than its true value, and inconsistent with comparable real property on the assessment roll. Specifically, the Assessor has determined that the market value of my property is [Assessor’s Market Value], when the true market value should be [Your Market Value], as determined by the following:

[Use whichever apply]

  • The attached appraisal shows a value of [appraisal value]. The appraisal was conducted by [Appraiser] on [date] for the purpose of [purpose: refinance, purchase, etc.].
  • I purchased the property on [date] at a market value of [sales price]. The sale was an arms-length transaction, and did not involve a seller under distress [make sure that statement is accurate].
  • The property is currently for sale at a value of [listing price] and has been on the market since [original listing date].

Also, a review of comparable sales at the time of the valuation date demonstrates that properties of similar size, style, and amenities have sold for a price inconsistent with the Assessor’s determination of market value. My property has [number of bedrooms] bedrooms and [number of baths] baths, is approximately [square footage] square feet, is on a lot that consists of [acreage] acre(s), and is located in [village or town]. These comparable properties have sold at prices significantly below the market value determined by the assessor

[List comparable sales like this]

  • Property at [address] sold on [date] for [price]. The home consists of [bedrooms, bathrooms, square footage, acreage], and is located in [town or village].
  • Property at [address] sold on [date] for [price]. The home consists of [bedrooms, bathrooms, square footage, acreage], and is located in [town or village].
  • Property at [address] sold on [date] for [price]. The home consists of [bedrooms, bathrooms, square footage, acreage], and is located in [town or village].

Accordingly, we respectfully submit that the market value of the property be reduced to [your market value], and the assessed value be reduced to [your assessed value].

Thank you for your courtesies in this matter.

Very truly yours,

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Posted on May 12, 2017 at 10:11 am
James Troia | Category: Guide to Tax Grievances in New York

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