Black and other minority homeowners in the United States pay disproportionate amounts of property tax compared with their White counterparts, according to a study released in 2020.
The academic study, “The Assessment Gap: Racial Inequalities in Property Taxation,” found that Black and Hispanic households pay 10% to 13% more than White households for the same public services. This information can be attributed to something known as the “Black tax,” which is specifically relevant to property tax. In this article, learn more about how it works.
What is a “Black tax” in property assessment?
According to the “Assessment Gap” study, the problem is nationwide. The study looked at taxes on 118 million households via 75,000 taxing entities and found that Black households pay at least 10% more than White ones in most U.S. states. The overtaxation results in around $300 to $390 more in annual property taxes for the median homeowner.
These higher tax bills are often referred to as “Black taxes,” and this latest study is only one of many to confirm it. In 2017, a Chicago Tribune investigation into the city’s property taxes showed that minority communities shoulder “an unequal burden” in the city. A look into Philadelphia’s taxes showed similar results.
According to all these studies, the overtaxation stems from property assessments, which tend to be higher-than-market value in largely Black and minority communities.
“The Black tax is a widely held belief that homes in areas with Black and brown families are assessed at higher values than the market would call for,” said Rommie Wheeler Jr., an attorney in Birmingham, Alabama. “Property taxes are based on an assessment of your home, not the market value. This inflation in value results in higher property tax bills for Black and brown families.”
Find out if your taxes are too high.
Black homeowners can find out if they’re paying a “Black tax” by looking at recent home sales in their area—particularly sales of homes in a similar size, age and condition to their own. Their home’s assessed value should be in line with these other properties.
“[Black] homeowners can ensure that their taxes are fair and in line with other similar properties by doing their own research on similar homes throughout their living radius,” said Michael Slevens, a property tax consultant at PropertyCashin.com. “By obtaining comparable sales of homes in their neighborhood, they can see clearly if the home assessments are accurate.”
Homeowners who find they’re being taxed disproportionately highly can appeal their property tax assessment with the local appraisal district or assessor’s office. This is sometimes referred to as “protesting” your property taxes.
How to appeal your assessment
Appealing your property taxes is critical if you think you’re being overtaxed. In fact, according to the findings in the “Assessment Gap,” a lower rate of appeals may contribute to Black households paying more in property taxes. In Chicago’s Cook County, the second-largest county in the United States, for example, the study mined court records to conclude that minority homeowners were less likely to appeal their assessment, less likely to win and typically receive a smaller reduction than non-minority residents.
“Protest the value of your home,” Wheeler said. “In most cities and municipalities, they have an authority or board that is charged with hearing the challenges. You have the opportunity to speak before the authority, giving the reasons why you feel the assessment is incorrect. Your chances for success are greatly improved if you can bring supporting documentation outlining your reasoning.”
To start the process, you’ll need to contact the appraisal district or county assessor’s office. You must fill out a protest form and, depending on your location, you may need to provide evidence supporting your lower property value. In many places, you’ll be scheduled for a hearing, which is when you’ll present this evidence to a review board and make your case.
Homeowners who aren’t comfortable protesting their property tax assessments themselves can seek professional help. Many property tax consultants and attorneys offer tax protest services.
According to Slevens, appealing your property taxes annually is important, no matter where you’re located. “Over time, neighborhoods go through a transition from being desired, new and up-and-coming to aging and no longer being desirable,” Slevens said. “Home values reflect this and therefore need to be protested each and every year to follow this downtrend in values.”
Key takeaways
- Studies show that Black and minority homeowners regularly pay more in property taxes.
- Homeowners can take steps to try to prevent being overtaxed, including analyzing recent similar home sales in the area.
- It’s advisable to appeal, or protest, your property taxes if your home’s assessed value is out of line with comparable properties.
- Speaking to an attorney or local property tax consultant is also an option.
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