Real Estate Tax Appeals: When Do You Need an Attorney

Real Estate Tax Appeals When Do You Need an Attorney

Two of the most common real estate legal issues involve taxes. One is the issue with property taxes and the second is with other forms of tax law, such as like/kind exchanges and minimized realty transfer fees in transactions and payment in lieu of taxes (PILOT) agreements.

These can all be tricky issues, and if you do not like the decision of a governing body on certain types of issues, you can appeal. In fact, you can appeal your assessments, certain tax liabilities or deadlines, and more.

The question becomes when you can handle things yourself, handle them through your accountant, or when you need to get an attorney involved. Here are some tips for when to get legal counsel on your side.

When the Money Makes it Worth It

The first question to ask yourself is how much money is involved. Attorneys are not cheap, and you need to make sure that the money you spend on the appeal will be justified by the money you save, essentially your return on investment.

Sometimes the taxes you save long term are certainly worth it, especially if you own a lot of property or you are talking about valuable commercial real estate. In those cases, the costs can run into the hundreds of thousands of dollars rather quickly.

Sometimes the money is worth it to defend a principle. If your property taxes suddenly double, the appeal may be less about the money and more about the fact that if they doubled once, they can do so again, and the result could be costlier than just this single increase.

The point is to be conscious of what an appeal of any sort will cost, and what the return will be on investing in an appeal, whether financial or moral.

When Things Get Complicated

The other aspect of the law, often tax law in particular, is that it gets complicated. While your real estate broker or agent may know something about tax law and various situations, they are not trained to dispute them in a court case. There are also interesting issues with the overlap of jurisdictions as well.

There are property and tax laws in townships, cities, counties, and states. Other income from real estate laws apply to your Federal taxes as well. How these laws interact with one another can be tricky, especially when you are considering the appeal of any legal decision.

The fact is that not all cases are even eligible for appeal, and a good appellate attorney can sort out those instances for you and make sure you file the appropriate materials in a timely manner. Appeals are often time and deadline sensitive, and meeting those deadlines is critical.

When Other Parties are Involved

It’s one thing when you have a legal issue on your own, but in the case where you either have a dispute with your neighbor or HOA or when you share things in common like property tax concerns, having an attorney means everyone is on a level playing field.

If you are in agreement, the attorney can represent the group, meaning your legal fees are more affordable and the same issue can be addressed in a single action. For instance, if the property values and therefore taxes in your neighborhood have risen disproportionately to the neighborhoods around you, you may be able to file suit as a single group.

If you have a dispute over property lines or perhaps that some action your neighbor has taken than impacted your property assessment, you may want to hire an attorney to take the personal feelings out of the conflict. It makes the issue entirely about the law and not any resentment you may have for each other.

When you have another party involved, an attorney can be a buffer or an unifying factor, making it more likely that your action will be successful.

When You Need a Good Negotiator

Not all of us are good at negotiations. It is why you take that one friend with you when you go to buy a car. However, in the case of legal issues, sometimes an attorney simply knows what is negotiable and what isn’t, and how to best approach the agency or court involved.

For instance, in the case of property taxes, usually you can only appeal the amount of the assessment, not the tax rate or the school levies or other factors that might affect your taxes. An appellate attorney can also tell you about the risks involved. For example:

  • It is possible (but not likely) that your assessment could go up, actually increasing your taxes.
  • Lowering the assessment on your home before you put it on the market can reduce the price you can ask for it.
  • Lowering your assessment can result in your neighbors’ homes being reassessed as well.

An attorney will know the legitimacy of these concerns and more, and be able to advise you more accurately on your appeal, and will be able to negotiate more effectively than you can on your own.

When There is a Threat of Criminal Charges

When tax issues get serious enough, sometimes there can be the threat of extreme legal action or even criminal charges if you don’t pay them in a timely manner. You should never try to handle these issues yourself unless you have extensive legal experience.

These types of issues should be taken very seriously, and you should consult an attorney right away if there is any threat of criminal charges or a large civil suit.

Real Estate can be tricky, from property taxes and assessments to other disputes. While you may be able to manage some of them yourself, the best course for the most part it to find a good attorney, especially when you are in a position where you need to file an appeal. A good appellate attorney can save you time, money, and additional legal trouble.


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