For residential property tax appeal consulting the cost falls in a narrow range. Your best bet is to find the most qualified consultant that you can. Typical residential flat fees may be $350 or higher. Alternatively, many companies charge $250 up front and 25% of whatever tax savings are generated. Some offer $150 +/- plus a third of the tax savings generated. Generally speaking qualifications are more important than saving a few dollars in up-front cost.
Beware of companies that send you a letter or postcard that says "this is how much we think we can save you $." You can be reasonably certain they are using a database of old values to generate these postcard savings estimates. I would be very cautious about this, especially if there’s a high flat fee involved. Some of these companies may charge $350 or more, and if you’re in a city or county that reappraises on an annual basis, spending that much money may be a losing proposition. If they get a reduction that doesn't cover their service fees, and the County increases your tax assessment the next year, then you have just wasted your money.
Commercial property tax appeal costs also fall in a narrow range. So again, I would look at qualifications. The dollars that you save probably aren’t worth going with the low cost leader. If you have a high value commercial property you can probably get a property tax appeal done on a contingent basis (percentage of the tax savings). Some consultants charge an upfront fee of $250 and 25% of tax savings and many consultants will do tax appeal work on high-value properties for strictly 25%-33% of the tax savings.
Why not choose a firm that will give you a free consultation? A good firm will take a look at your value and give you an idea of whether there are potential tax savings there. Then you can do a cost-benefit analysis yourself to decide whether or not it’s worth it to engage the firm.
You can also do your own cost-benefit analysis with your own time included. Decide whether you want to appeal the tax assessment yourself or whether you want to pay someone else to do this. Take a look at how much tax savings you might be able to generate, and how much time it might take you to prepare a property tax appeal case and potentially drive to the tax assessors office to talk to the County appraiser. If that doesn’t work, how much additional time/expense will you incur if you drive to a formal board hearing to argue your case. Based on how you value your own time, and any time away from work, subtract your cost from the potential tax savings. You may have to take into account the number of years the reduction might hold. Now you can look at your cost, the cost of the consultant, and based on the potential tax savings make an informed decision.
A property tax consultant like myself will do everything we can to get your property tax burden reduced. We will use multiple approaches to value to see if we can find one that supports a lower value. We will look at equity to see if the property tax assessment is unfair and whether we can get it reduced that way. There are no guarantees however.
Some real estate owners don't want to pay an up-front fee for a property tax service. The reasons property tax consultants charge an up front fee include research tools, time, travel, and collections. Also house values are generally too low to do this work on a straight contingent fee basis. Paying a property tax consultant is similar to paying a real estate appraiser up-front. The appraiser wants to be paid first because he (she) knows that if you don't like their value estimate you are less likely to pay.
