26. Why Your Neighbor Pays Less in Property Taxes: Assessment Injustice Explained

26. Why Your Neighbor Pays Less in Property Taxes: Assessment Injustice Explained gives you a clear, step-by-step way to understand what drives your bill, what to verify on your notice, and what to do if the numbers look off.

If you’ve ever noticed that a neighboring house, nearly identical to yours, has a much lower tax bill, you may feel it’s unfair. In truth, there are many legal and practical reasons two similar homes can be taxed differently. It isn’t always injustice – often it comes down to variations in assessed value, exemptions, or local tax rates. Understanding these differences is the key to addressing any genuine inequity. How Assessments and Valuations Differ Local tax assessors determine each property’s assessed (taxable) value based on its market value and characteristics. Even two homes that look alike on the surface can have very different assessments:

• Property characteristics: A home with a finished basement, newer roof, or extra garage space will be

assessed higher than a smaller or older neighbor’s home. If your neighbor has recently renovated or added rooms, their assessed value could rise. Conversely, if your home needs updates or has structural issues, its true value may be lower (though it might not show in the assessment until you appeal).

• Sale price vs. tax basis: If a home recently sold at a price below its prior assessed value, it might be ripe

for a reduction – but that process isn’t automatic. One neighbor’s assessment might lag the market; the other’s might have been updated already. Differences like these lead to one home paying more in taxes. In short, assessed value – not property size – primarily drives the tax difference. Tax Rates and Exemptions Vary Even in the same town, different exemptions or levy rates can apply:

• Homestead and senior exemptions: Suppose your neighbor is a senior citizen who qualified for a

homestead reduction or senior exemption. They may pay thousands less in taxes. Similarly, veterans, low- income homeowners, or historic property owners might receive tax breaks. If you didn’t qualify (or didn’t apply in time), you’d have a higher taxable value and thus a higher tax bill than your neighbor with exemptions.

• School or municipal levies: Some neighborhoods overlap multiple school districts or special tax zones

2 (like libraries or parks). If your address falls in an extra levy area that a neighbor’s doesn’t, your rate is higher. Likewise, two adjacent municipalities can set very different rates even if services seem similar. Check your city and county rate schedules to see if you’re in a high-tax district. Appeals and “Assessment Injustice” Legally, every homeowner has the right to protest their assessment if they believe it’s too high. If your neighbor successfully appealed last year, lowering their assessed value, they’ll pay less tax than a similar home that didn’t appeal. In fact, most homeowners never file a protest 11 , so one fortunate neighbor can end up paying far less than one who didn’t appeal.

While disparities are often explained by the above factors, unfair treatment can occur. For example, academic studies have found that minority or low-income neighborhoods sometimes end up with higher effective tax rates relative to value. If you suspect outright bias or error, you should gather evidence of similar homes’ values and discuss the discrepancy with the assessor or appeal board. Key actions: Don’t just assume the gap is impossible to challenge. Compare your assessments: write down your home’s assessed value and your neighbor’s, along with any differences in size or amenities. If the numbers don’t match your real-world observations, file a review or appeal. Many counties let you start

with an informal review by the assessor’s office; others require a written petition. Keep in mind that appeals are usually free and can be submitted online. If you do find that your neighbor’s lower tax burden was due to a legitimate exemption or appeal, you might still have options. For example, some places allow you to apply for new exemptions mid-year, or to transfer certain benefits to an inheriting spouse. Otherwise, the best remedy is an assessment appeal (see the next article). Bottom line: Differences in property taxes between neighbors are usually due to differences in valuation, exemptions or local tax rules 12. It’s frustrating but often fixable – start by checking your assessment

against market values and talking to your local assessor. If needed, consult PropTaxHelper’s experts to navigate the appeals process or to verify that you’re not missing any tax breaks.

Next steps

• Use the Property Tax Estimator to sanity-check your bill.
• If something looks off, run a quick Appeal Savings scenario.
• Scan the Articles list for related topics like exemptions, deadlines, and escrow planning.