Residents and commercial property owners across Milwaukee and Wisconsin are in sticker shock after receiving notices of huge increases in real estate property tax assessments in the mail. Property owners must be left to wonder: what in the world is the assessor thinking? Milwaukee’s assessors, in particular, could not have sent their revaluation notices at a worse time. While the COVID-19 (Coronavirus) pandemic has shuttered many businesses and put people out of work, property owners are looking for ways to cut expenses to keep their homes and maintain tenants. Property owners are now left to worry about the potential for big increases in next year’s property tax bills because of higher assessments.
While Wisconsin property owners have little or no control over tax rates, the time to object to property tax assessments and challenge assessed values is now.
Real Property Must Be Assessed at its Fee Simple Fair Market Value
In Wisconsin, the law requires that real property be assessed at its fee simple fair market value. Assessments are presumed to be correct. However, the law also requires that assessments be calculated using one of three tiers of valuation methodology. The first tier and best evidence of a property’s fair market value is a recent arm’s length sale of the subject property. If there has been no recent arm’s length sale of the subject property, then the second tier and next best evidence of value are recent sales of comparable properties. Finally, only if neither of the first two tiers of evidence of value exist can the assessor consider other third tier approaches to value, like the cost and income approaches.
Some assessors choose to ignore fee simple sales of comparable properties, especially for commercial properties, in favor of higher leased fee sales to increase assessments. In addition, some assessors choose to ignore all sales of comparable properties and jump directly to the third tier cost or income approaches to value. These third tier methods give the assessor the ability to adjust rates and calculations to increase assessments.
If an assessor used the incorrect valuation method or failed to apply the three tiers of valuation methods in order, then the assessed value carries no presumption of correctness. All property owners have the right to object to their assessments with the local municipality and in circuit court.
Filing an Objection to Your Property Tax Assessment With Your Local Municipality
Property owners who want to object to the assessed value of their real property have the legal right to file an objection and challenge their property’s assessed value with the local municipality. Property owners must be careful not to miss a deadline or step in the process, or their objection could be rejected, and they could have no further recourse. The statutes and objection process were designed to be confusing, even for sophisticated property owners, and they favor the assessor. All the steps in the objection process are mandatory and have strict deadlines. Residential and commercial property owners should consider hiring an experienced attorney to assist them in all steps of the property tax assessment objection process.
The first step to object to your property tax assessment in Milwaukee and some other larger municipalities in Wisconsin, like Madison and Kenosha, is to file an objection with the local board of assessors. Assessors may be willing to discuss an adjustment to your assessment if you can show a mistake or error. The option to discuss your property’s value with the assessor is also available during the open book period. However, in most cases, the board of assessors will deny your objection unless you can show some demonstrable error in how the assessed value of your property was calculated. After the board of assessors denies your objection, the next step is to appeal to the board of review.
For communities in Wisconsin without boards of assessors, filing an objection with the board of review is the first step in the objection process. After you file your objection, the board of review will set up a hearing time for you to present evidence of your property’s fair market value to the board. The board of review may allow you to appear by phone (the board must allow ill or disabled persons to appear by phone) and may allow you to waive the hearing altogether, but neither option is guaranteed. When presenting your evidence of value, the board of review will most likely reject any evidence that does not rise to the level of a formal appraisal of the property. Even if you obtain an appraisal that shows a lower value, the assessor’s value might still prevail because it carries a statutory presumption of correctness.
Many municipalities have links to objection forms available online. In addition, many communities have altered their open book and board of review procedures due to the COVID-19 (Coronavirus) pandemic.
Wisconsin Property Owners Have Options to Challenge Their Property Tax Assessments
Property owners who lose their objection with the local municipality in the administrative process described above can file a lawsuit to challenge their property tax assessment. Property owners must still go through the administrative procedure described above, but they are not without further recourse after their objections are denied by the local municipality.
Claims and actions for excessive assessment put the issue of a property’s fair market value directly before a Wisconsin circuit court judge. In an action for excessive assessment, property owners can put forth their own evidence of value. The judge will then examine the assessment methodology and opinions of value to determine the property’s fair market value. Navigating the court process is challenging and should not be done without a lawyer.
Contact a Wisconsin Property Tax Assessment Lawyer
Property tax assessment increases have put pressure on property owners in Wisconsin. If you find yourself in need of the advice of a Milwaukee and Wisconsin real estate attorney with property tax assessment experience, contact one of the attorneys at Gimbel, Reilly, Guerin and Brown LLP to discuss your case. Call our office at 414-271-1440 today.