How to Fight Back Against Soaring Property Taxes and Save Thousands: The Case for Proactive Appeals

The relentless rise of property taxes is quietly eroding real estate investment returns, turning a once-steady asset class into a cash flow minefield. With median annual tax bills hitting $3,500 in 2024—a 2.8% jump from the prior year—investors must adopt aggressive strategies to preserve equity. Enter property tax appeals: a low-risk, high-reward tactic to reclaim hidden value. Recent data reveals that successful appeals can slash annual taxes by $539 on average, while extreme cases have seen reductions of 35% or more. This isn’t just about saving on bills—it’s about safeguarding capital in an era of over-assessment.

The Math of Over-Assessment

The numbers are stark. Realtor.com estimates that over 40% of U.S. homes are overvalued by local assessors, creating a $539 median annual savings opportunity for those who appeal. In Minnesota, one homeowner slashed her 2025 tax bill by 35% after a lawyer argued that her property’s assessed value ($574,200) vastly exceeded its market reality. The county locked in the reduction for five years—a move that saved her over $3,000 annually.

This isn’t an isolated case. A National Taxpayers Union Foundation report estimates that 30%–60% of U.S. properties are over-assessed, often due to flawed data (e.g., incorrect square footage, outdated renovations). Even a 10% reduction in assessed value can save $350+ per year—a figure that compounds over time.

Regional Disparities: Where Appeals Pay Off Most

The stakes vary wildly by state. In high-tax regions like Cook County, Illinois, appeals are a lifeline. A recent report revealed that businesses there successfully shifted $1.91 billion in tax liability onto homeowners over three years, driving a 7% spike in residential bills. Meanwhile, states like Florida and Texas—which lack income taxes but rely heavily on property levies—see frequent over-assessments tied to booming real estate markets.

In contrast, states like North Dakota offer tax relief programs (e.g., the Primary Residence Credit, up to $500) that reduce the need for appeals. But even here, savvy investors can leverage homestead exemptions or zoning disputes to cut bills further. The takeaway? Appeals are most critical in high-tax, fast-growing markets where assessors lag behind market realities.

Action Steps for Investors: The 3-Point Playbook

1. Audit Your Assessor’s Math:
   Compare your property’s assessed value to Zillow’s Zestimate or Redfin’s estimates. A gap of more than 10%—common in rapidly appreciating markets—justifies an appeal. Use tools like
   TaxJar to track discrepancies.

2. Leverage Professional Tools:
   Hire an appraiser to document undervalued comparables or property flaws (e.g., deferred maintenance). In the Minnesota case, an independent appraisal showing a 65% undervaluation was the linchpin of success.

3. Act Before Deadlines:
   Miss the window and you forfeit your chance. In Michigan, the 2025 deadline was extended to June 2, but most states enforce strict Q2 cutoffs. Use the
   IRS’s online tool to confirm deadlines for your region.

Why This Is a Due Diligence Must for Distressed Properties

When acquiring foreclosed or underperforming assets, an appeal should be part of the purchase process. A vacant commercial property in a declining market, for instance, may have an assessed value based on peak-era valuations. Challenging this using occupancy rates or cap rate trends can cut taxes by thousands annually—a critical adjustment to cash flow models.

The Bottom Line: Appeals Are the New Due Diligence

With tax assessors increasingly out of sync with market conditions—and investors facing inflation-driven valuation spikes—the time to act is now. A property tax appeal isn’t just a cost-saving move; it’s a strategic equity preservation tactic.

For those acquiring real estate in high-tax states, failing to appeal is akin to leaving money on the table. The data is clear: $539 in annual savings is the baseline. The question is: Will you settle for that, or aim for the 35% reductions seen in Minnesota?

The window to act is closing—file your appeal before deadlines expire this June.