What to Do if You Believe Your Property Tax Valuation is Too High

Beginning in June, the final valuation for properties in Nebraska will be released. After the final valuation are released, the window for protesting the valuation begins, and it runs through July 1st. The valuation of property is important to taxpayers because it is the bases that is used to determine a taxpayer’s property tax liability. The increasing valuations leave a lot of people wondering: What can I do if I believe my property tax valuation is too high?‍

1. ‍Property Tax Background
   • ‍The timeline of property taxes can be difficult to understand because it spans over multiple years. The first important note when talking about property taxes is that the valuation received in a year is for the property taxes that will be paid in the following year. For example, in June the Douglas County Assessor will announce the valuation of properties for the year of 2024, these will determine the taxes that are going to be owed in 2025.Another important note regarding the timeline of property taxes is that the valuations are done as of January 1 of that year. This becomes especially important to taxpayers when they are building on their property. If a taxpayer’s property is under construction as of January 1, the county will apply a percentage complete factor to the valuation and the property will only be valued based upon the percentage that is done. For example, if a taxpayer’s property was only 60% complete as of January 1, the county will only consider 60% of the valuation that will be used when the property is 100% done. Thus, if the property will be valued at $100,000 (at 100% completion), the valuation when it is under construction will be 60% of the $100,000 or $60,000.
2. ‍Protest Process
   • ‍The unique aspect of property taxes is that taxpayers are allowed to protest the valuation that is given by the county. The window to protest runs June 3 - July 1, 2024. During this time, taxpayers are allowed to file a form with the County Assessors that will explain why they believe their valuation to be not a true representation of the fair market value of their property. After the form has been completed, the taxpayers will be contacted by “referees.” Referees are neutral third-parties that are hired by the Board of Equalization (“BOE”) to make a look at evidence and make a recommendation to the BOE regarding if the valuation given by the county or by the taxpayer is the fair market value of the property. After the referees have made all their recommendation, the BOE will meet and vote on the protested values. After the valuation are voted on, that is the final value that will be used to determine property taxes.During that process, a lawyer is not needed as there is no practice of law. However, if after the valuation are voted on, if the taxpayer still believe the valuation to be wrong, they can appeal the decision to the Tax Equalization and Review Commission (TERC). At this point in the process, a lawyer is required as this is the practice of law. If a taxpayer decided to appeal the decision to TERC, it is important to understand they will still be required to pay the taxes for that coming year. It can take a few years before an appeal is scheduled for TERC.
3. ‍What Should I Include in My Protest?
   • ‍If a taxpayer wishes to protest the value given by the assessor there are several key pieces of evidence that can be used to show fair market value. The first, and strongest, piece of evidence is an appraisal. If within the last year, a taxpayer has received an appraisal of their property the county will typically rely upon these to show the fair market value of the property. The second piece of evidence that can be presented is a recent sale of the property. The county will typically used this as evidence of fair market value because this is what the property actually sold for on the market. The only thing to consider is whether the transaction was an arms-length transaction, especially for the sale of commercial property. The final way a taxpayer can present evidence that their valuation should be lowered is through an equalization argument. Through the County Assessor website, taxpayer can look up any property’s valuation located within their jurisdiction. If a taxpayer’s property is valued significantly higher than those in similar position as them, this can be a good argument for why their valuation should be lowered. When looking for similar position property, consider factors such as classification of the property (residential, commercial, warehouse, industrial, etc.), the year the property was built, the area in which the property is located, the number of square footages, etc.CONCLUSIONIn conclusion, the property tax protest season is upon us. This allows taxpayers the unique ability to be able to protest the valuation of their property and hopefully be able to lower their tax liability for the upcoming year. The ability to protest the valuation will end on July 1, 2024. There are several arguments that can be made to show a lowering of valuation, such as an appraisal, sale price or equalization. It is important to look at the valuation the county has assigned for a property and ensure that it aligns with the fair market value and is equalized among similar properties in the county.