A rising tide lifts all boats, the saying goes. But there's a downside to the booming economy: homeowners are watching their property taxes hit the high water mark.

“Local governments are making higher assessments for homes as the real estate boom inflates property values,” says Richard Roll, president of American Homeowners Association. “Remember that you're not necessarily stuck with your property assessment. You have the right to challenge the assessor's finding if it looks too high.” For more information, go to http://www.ahahome.com

Property taxes go toward local services such as schools, roads, police and fire protection, and social services. Most localities reevaluate property values every year, in an attempt to track market rates and charge taxpayers what their homes are worth.

Unfortunately, that means you'll pay a lot more when property values soar, and that's the situation today.

Although assessments vary from region to region, the taxable value of property is mostly up across the country.

Take the booming real estate market in Orange County, California, for example. In Orange County new home construction is up a whopping 24 percent, and sales are up almost 13 percent. That forced the taxable value of property up 8.7 percent this year, according to assessors.

Unfortunately, property assessments are frequently inaccurate. Every step of the assessment process has opportunities for error, including simple mathematical mistakes, faulty comparisons with other properties, incorrect facts concerning your individual property, and more.

A property assessment is full of variables that can skew a tax bill by hundreds or even thousands of dollars.

Most homeowners don't realize that it's worth the time and trouble to question their valuation. Although a 12-city study by the National Taxpayers Union found that 60 percent of properties were over-assessed, only about 2 percent of all homeowners challenge their assessment. That's too bad. Of those homeowners that do appeal, most end up winning.

What if you think the assessor made a mistake and charged you too much? Your valuation notice should have information on how to appeal your assessment.

Move quickly, or you could miss the deadline for challenging your valuation.

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