(MONEY Magazine) – If you feel that your property taxes are gnawing an ever-bigger hole in your wallet, you're not alone. In our latest Americans and Their Money poll of 300 subscribers, 60% said that their real estate taxes rose in 1992. According to the National League of Cities, property taxes went up an average of 5.5% in fiscal 1992. The hardest-hit region was the economically ailing Northeast, where a staggering 72.8% of cities and towns hiked their taxes. What's worse, in many places, because of errors in appraising the value of property, half the homeowners may be paying more taxes than they actually owe, according to property tax specialists interviewed by MONEY. ''Sometimes it's shocking how far off you are,'' says Louise Thureen, the tax assessor in Hibbing, Minn. If you think you're paying more than your fair share, don't mope: Appeal! About half the people who challenge their property tax bills wind up cutting them 10% or more, estimates Thomas Breecher, manager of multistate tax services for Coopers & Lybrand. ''Property taxes are more subject to whim and idiosyncrasy than other forms of taxation,'' explains David Keating, executive vice president of the National Taxpayers Union, a Washington, D.C. lobbying group that offers an informative 12-page brochure, How to Fight Property Taxes; send $2 to 713 Maryland Ave. N.E., Washington, D.C. 20002. (To find out the average property tax on a four-bedroom house in the 100 biggest U.S. metropolitan areas, turn to the exclusive MONEY table on page 99.) Winning a tax fight on the picket-fence level takes no special expertise -- just a determination to be treated fairly by tax officials. As an example, consider the case of Tom and Geri Kuchenberg, pictured on page 98, who pay about 36% of their $71,440 adjusted gross income in taxes, including $1,762 to Washington, D.C. for their three-bedroom, turn-of-the-century townhouse on Capitol Hill. Tom, 50, a lawyer with the Food and Drug Administration, has twice cut the couple's taxes by convincing the assessor that his house was overvalued. The first time, in 1988, he showed Polaroids of three comparable townhouses -- all in better shape than the Kuchenbergs' but assessed for similar amounts. As a result, he lowered his assessment by 6% and his bill by about $100. That experience led Tom and a half-dozen neighbors to create the Capitol Hill Taxpayers Alliance. Each spring since 1990, the group has given local homeowners workshops on cutting property taxes. In 1991, the Kuchenbergs won another property tax reduction. Tom had invited the assessor to visit the couple's townhouse in the fall of 1990 because he knew an areawide revaluation was coming. The Kuchenbergs remembered that during a previous revaluation, tax officials had made what Tom calls ''a windshield assessment'' -- never entering the house. So Tom wanted to make sure that this time the assessor would see the water-stained living room ceiling from a 1978 fire, raw plaster in the upstairs hallway and an unfinished bathroom renovation. The assessor knocked $30,000 off the house's valuation, and the Kuchenbergs' tax bill plummeted by $288, a 19% saving. The odds of winning such appeals seem to be getting better. One reason: Assessors, shorthanded because of budget cuts, are making more mistakes. For example, in Hibbing (pop. 18,000), which taxes 10,000 properties, Louise Thureen is one of only two assessors, down from four in 1982. State law requires the assessors to view each property every four years -- a clearly unmanageable workload of 1,250 visits a year. Not surprisingly, appeals in Hibbing, where property tax bills on houses average around $400, doubled to about 150 last year. Two-thirds of the challenged bills were revised. Typical savings: $50 to $100. Fighting unfairly high property taxes is especially worthwhile in places like the suburbs around Syracuse and Pittsburgh, where tax bills amount to 3% or more of a house's assessed value, and in communities such as Long Island, N.Y. and the San Jose suburbs, where property taxes rank among the highest. In these areas, tax rates are sometimes inflated to compensate for out-of-date assessments that don't reflect current housing values. Alternatively, their residents may pay steep bills because of duplication of services provided by their towns and counties. Long Island clients of lawyer Fred Perry of Dix Hills, N.Y. have 6,000 property tax appeals pending, up from 1,400 in 1990. ''In 1991, nearly all my 3,000 clients won reductions, saving an average $1,300 each,'' he says. If you have reason to believe your taxes are unfairly high, follow these strategies to improve your chances of winning an appeal: First, learn a few key terms and some simple math. Your correct assessed value is what you get when multiplying your home's fair market value (what the property would sell for) by its assessment ratio (the percentage of fair market value subject to tax). For an accurate property tax bill, officials must multiply the correct assessed value by the local tax rate, sometimes called the mill rate. The tax rate is set by law and can't be changed by appeal; your aim is to lower the assessment. The assessment ratio often trips up homeowners, since some communities use full market value when computing tax bills -- for an assessment ratio of 100% -- while others use a fraction of market value. In Connecticut, for example, houses are typically assessed at 70% of value; in Louisiana it's 10%. ''Fractional assessment can create a dangerous illusion,'' says David Keating of the National Taxpayers Union. ''People think they're making out like bandits when they're actually having their pockets picked.'' For example, if your house is worth $200,000 and is assessed at $180,000, you may think you're getting a break. But if your town sets assessments at 75% of market value, you're actually being overassessed by 20% and are thus overtaxed. To find out your municipality's assessment ratio, visit the assessor's office and ask. At the same time, check your property record card for mistakes. The card -- these days it may be a computer printout -- lists descriptions of your home such as your lot size, the age of your house, the number of rooms, the type of heating and air-conditioning systems, and the property's most recent estimated market value. Checking your card can prevent the kind of snafu that almost cost Karen Matherlee, a 50-year-old health policy analyst in Washington, D.C., her one- bedroom condo last March. She was shocked into reviewing her card when she was notified that her assessment had soared to $176,700 -- about $50,000 more than she had paid for the condo in 1990 -- boosting her tax bill 120% to $1,706. Matherlee found that a clerk had recorded the wrong lot number and the assessment was for the two-bedroom condo next door; worse, the taxes that she had paid were credited to the neighboring apartment. As a result, the city had listed her as a tax delinquent and planned to auction off her home. After protracted wrangling, she got an apology and a $499.81 tax refund in June. ''I have sympathy for the clerks, who were overworked and dealing with antiquated paper ledgers,'' Matherlee says. ''But at the same time, there was an enormous inequity for me.'' If you spot an error on your card, tell a staffer in the assessor's office; someone will probably make a home visit to verify your claim. Even if the card seems in order, ask a clerk for a list of the property tax breaks available to homeowners. You may be entitled to one. Some 44 states exempt a portion of the assessed value for certain homeowners -- typically if they are elderly, disabled or veterans. Most errors are readily corrected. But if the estimated market value on your card seems excessive, you'll have to show the assessor that at least three similar properties sold for less either six months before or three months after the valuation date of your home. You can stretch the time limit to a year or two if your real estate market is sluggish -- if houses take longer than six months to sell, for example. The assessor can often provide you with sales prices of properties comparable to yours. If not, ask a real estate agent for the figures. Alternatively, you can hire a real estate appraiser for a written valuation of your property (cost: $250 to $500). Choose a pro who belongs to the Appraisal Institute, the National Association of Independent Fee Appraisers or the American Society of Appraisers, all of which set standards for members. Be careful not to lose your temper when making an appeal. ''It's best to get off on the right foot,'' says Vincent Czaplyski, co-author of the Homeowner's Property Tax Relief Kit (McGraw-Hill, $14.95). Most tax jurisdictions have informal hearing processes that let you call the assessor for an appointment. ''Start that way,'' says Czaplyski, ''and describe the inequities in a nice, conversational tone.'' Don't expect to get 100% of what you want; have a fallback position in mind. If you reach agreement, ask the assessor for a letter of confirmation. In some instances, taxpayers get no satisfaction from assessors. ''Government appraisers can be tough,'' says Jim Smith, the property appraiser for Pinellas County, Fla. ''They sometimes have the attitude that 'it's us against the taxpayers.' '' If you feel you didn't get a fair hearing, carry your case to the next level, usually a formal review board made up of public officials and others who are knowledgeable about the local real estate market. At this point, you could hire a property tax consultant or real estate lawyer to fight the battle for you. Either will most likely charge 50% of the first year's tax savings if you win, nothing if you lose. Some assessors, however, are leery of such hired guns. ''The officials may give more weight to the opinion of an independent appraiser, whose pay isn't tied to the case's outcome,'' says Czaplyski. If you pursue your case on your own, prepare to encounter annoying red tape. Read the official forms carefully because they'll note dates when written appraisals or other supporting documents must be submitted. If you miss one of these deadlines, your appeal could be summarily dismissed. Attend a hearing in advance of your own -- most are open to the public -- to learn the procedures and the kinds of questions you may be asked. Keep your presentation precise, short and polite. ''The appeals board sits for hours listening to people who often don't know what they're talking about,'' says Keating. ''Don't annoy the board by arguing that you can't afford your taxes or that local officials are wasting your money.'' For diplomatic reasons, whenever possible, note what the assessor did correctly. While you may hear a verdict on the spot, boards normally mail their decisions within two to four weeks. And that could be the best tax notice you'll ever get.

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TAXPAYERS STAND AN EXCELLENT CHANCE OF WINNING APPEALS IN CITIES WHERE PROPERTY TAXES ARE UNUSUALLY HIGH.

EVEN IF YOUR PROPERTY TAX CARD AT YOUR LOCAL ASSESSOR'S OFFICE IS IN ORDER, ASK FOR A LIST OF BREAKS AVAILABLE TO HOMEOWNERS. MOST STATES PERMIT AUTOMATIC REDUCTIONS FOR THE ELDERLY AND OTHERS WHO FALL INTO SPECIAL CATEGORIES.