Real estate taxes often rank among the highest property expenses on your financial statement. While local governments set property assessments and tax rates, property owners can challenge assessed values to lower their annual tax bill. Identifying overassessments and navigating the property tax appeal process effectively can reduce your annual real estate tax burden.
The Property Tax Assessment Process
The process of real estate assessment starts with local assessors who determine the market value of real property — and sometimes personal property — within their jurisdiction. The taxing authority then establishes a budget for services such as schools, police, fire, and emergency response. That budget is divided by the total assessed value of all property in the jurisdiction to determine a tax rate, which is used to calculate individual property tax bills.
Most states reassess property values annually, while others follow a cycle of two to five years. It’s important to know your local assessment schedule and the appeal filing period. When assessment notices are sent out, property owners usually have 30 to 60 days to dispute the valuation. Missing a deadline to appeal can lead to serious financial consequences.
Real Estate Valuation Methods
The property tax appeal process relies on appraisal methodology. There are three approaches to valuing real estate: cost, market, and income. Each one emphasizes a different aspect of the market forces that affect a property’s value.
Cost Approach
This method calculates the cost to purchase the land and build the structure, minus depreciation as of the valuation date. Key factors include age, ceiling heights, and square footage, which significantly affect value.
Market Approach
Also called the sales comparison approach, this method estimates a property’s value based on recent sales of similar properties in the same area. Adjustments are made for differences in age, location, size, and other factors. The market approach relies on the principle of substitution, which states that a buyer won’t pay more for a property than the cost to acquire a similar one.
Income Approach
This method pertains to properties that produce rental income, such as office buildings, shopping centers, or apartment complexes. It evaluates market rental rates, expenses, vacancy levels, and operating costs to determine net operating income, which is then capitalized at a market-based rate.
Assessors use one or more of these methods to determine a property’s value as of a specific date — for example, Jan. 1, 2026.
Navigating the Property Tax Appeals Process
Property owners have the right to contest an assessment if they believe the property is overvalued. The process usually involves three steps and must start by timely filing an appeal
If an appeal is justified, the first step is usually an informal meeting with the assessor to present evidence supporting a value reduction. If the issue isn’t resolved, a formal appeal can be filed with the local appeals board. The last step, if needed, is a court appeal, which typically requires a property tax attorney and an appraisal expert.
Strategic Support for Your Property Tax Assessment
Property owners should regularly review their assessments — especially during reassessment years — and understand their rights if they believe their property is overvalued.
CBIZ’s property tax professionals can assist you in reviewing your assessments, identifying overvaluations, and handling appeals nationwide. Our team has extensive experience with real estate and personal property valuations for clients across various industries, including retail, warehousing, manufacturing, office, hospitality, and multifamily housing.
Connect with a CBIZ property tax professional to review your assessments, discuss potential appeals, or explore strategies to reduce your real estate tax burden.
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