I looked at a property tax bill last spring and almost spit out my coffee. Douglas County had assessed a 24-unit property at $2.1 million. We had just underwritten the same building at $1.65 million based on actual income and a market cap rate.

That's a $450,000 gap between what the county thinks the building is worth and what the income says it's worth. And the owner was paying taxes on the county's number. Every year. Without question.

We filed an appeal. It took about 12 hours of total work including research, paperwork, and a hearing. The assessed value was reduced to $1.72 million. Annual tax savings: $8,214.

Every year. Recurring. For the life of the ownership until the next reassessment.

Why Property Tax Assessments Are Often Wrong

County assessors have an impossible job. They need to assign a value to every property in the county, and they do it with limited data. For multifamily properties, they typically use some combination of comparable sales and cost approach. What they rarely use is actual income data.

That's the gap.

A residential home is worth what comparable homes sell for. But an income-producing property is worth what its income stream supports. If the county is using sales comps from a different submarket, a different vintage, or a different condition level, the assessed value can diverge significantly from actual market value.

Here are the most common reasons multifamily assessments are too high:

The county used comps from a higher-performing submarket. A B-class building in Central Omaha shouldn't be valued based on a sale in West Omaha.

The county doesn't account for deferred maintenance. A building that needs a $60,000 roof isn't worth the same as an identical building with a new roof. The assessor has never been inside your building.

The county inflated income assumptions. Some assessors use market rent, not actual rent. If your building has long-term tenants below market, you're being taxed on income you aren't collecting.

The assessment hasn't caught up with market conditions. Cap rates have expanded 50-100 basis points in many markets since 2022. Values have adjusted. Assessments often lag by 12-24 months.

The Process in Douglas County (and Most Nebraska Counties)

The property tax appeal process in Nebraska is more straightforward than most people realize. Here's the timeline and procedure.

Step 1: Review your assessment (June)

Douglas County mails valuation notices in June. You have approximately 30 days to file a protest with the County Board of Equalization. Don't miss this window. It's a hard deadline.

Step 2: Gather your evidence

This is where the work happens. You need to build a case that your property's assessed value exceeds its actual market value. The three most effective arguments for multifamily:

Income approach. Take your actual T-12 income and expenses. Calculate your NOI. Apply the prevailing cap rate for your submarket and property class. That gives you a value based on what the property actually produces, not what somebody thinks it might be worth.

For our 24-unit building, this looked like:

Gross rental income: $241,200

Vacancy and credit loss (7%): ($16,884)

Effective gross income: $224,316

Operating expenses (42%): ($94,213)

NOI: $130,103

Market cap rate: 7.5%

Indicated value: $1,734,707

Compare that to the county's $2.1 million assessment and the argument practically makes itself.

Comparable sales. Pull recent sales of similar multifamily properties in your submarket. Calculate the price per unit and price per square foot. If your assessed value per unit is significantly higher than what comparable properties are actually selling for, that's evidence.

Property condition. Document deferred maintenance, functional obsolescence, or anything that reduces the property's value compared to the "average" building the assessor assumes. Photos help. Contractor estimates help more.

Step 3: File the protest

In Douglas County, you can file online or in person. The filing is free. You submit your evidence with the protest form. Keep it organized and professional. Bullet points. Clear math. No emotion.

Step 4: The hearing

You will get a hearing date, usually within 30-60 days of filing. The hearing itself is typically 10-15 minutes. You present your evidence. The assessor's office may present their reasoning. The Board makes a decision, often within a few weeks.

Step 5: Further appeal if needed

If the Board of Equalization doesn't give you the reduction you believe is supported, you can appeal to the Tax Equalization and Review Commission (TERC). This is a more formal process and may warrant an attorney, but it's available.

The Real Numbers on Our Appeal

Here's the full accounting.

Before appeal:

Assessed value: $2,100,000

Tax rate (Douglas County 2025): approximately $21.05 per $1,000

Annual property tax: $44,205

After appeal:

Assessed value: $1,720,000

Tax rate: $21.05 per $1,000

Annual property tax: $36,206

Annual savings: $7,999 (we round to $8,200 when accounting for the avoided increase that was also on the table for the following year's reassessment).

Cost of the appeal:

Our time: approximately 12 hours

Filing fee: $0

Attorney: $0 (we handled it ourselves)

Total out-of-pocket cost: $0

At a 7 cap, $8,200 in annual expense savings creates $117,143 in additional property value. From a free filing and 12 hours of work.

When It's Worth It (and When It Isn't)

Not every property tax bill is worth appealing. Here's how to decide.

Appeal when:

Your assessed value is more than 10-15% above what you believe the property would sell for based on income or comps

Your property has significant deferred maintenance that the assessment doesn't reflect

Your actual rents are meaningfully below the market rents the assessor might be using

Cap rates in your market have expanded since the last assessment

You recently purchased the property at a price below the assessed value (your purchase price is strong evidence of market value)

Don't bother when:

Your assessed value is within 5% of what you believe the market value to be. The Board is unlikely to make minor adjustments, and your time is better spent elsewhere.

You recently purchased at a price above the current assessed value. The county will likely increase your assessment to match, and an appeal isn't going to help.

The tax savings would be under $500 per year. Technically still worth it, but the time and effort may exceed the benefit unless you systematize the process.

Scaling This Across a Portfolio

The real power of property tax appeals isn't one building. It's applying the same process across every property you own.

On a 100-unit portfolio across five buildings, we typically find two to three properties with assessments that are meaningfully above market. If each appeal saves $3,000 to $8,000 per year, you're looking at $10,000 to $20,000 in annual savings across the portfolio.

Over a five-year hold, that's $50,000 to $100,000 in cumulative expense savings. On top of the property value increase created by the higher NOI.

This is asset management. Not the glamorous kind. Not the kind that gets attention at conferences. The kind that shows up in the numbers.

The Takeaway

Your property tax assessment is an opinion. It isn't a fact. It isn't carved in stone. And in my experience, it's wrong often enough that checking it should be an annual part of your asset management process.

The filing is free. The hearing is straightforward. The savings are recurring.

If you own multifamily in Douglas, Sarpy, or Lancaster County and haven't looked at your assessment in the last two years, pull it up. Run the income approach. Compare it to comps. If there's a gap, file the protest.

Twelve hours of work. $8,200 per year. That's the kind of return that compounds quietly and builds real wealth over time.

If you own rental properties and you're not sure they're hitting their ceiling, let's talk. Reach out at Tanner@TopTierInvestmentFirm.com.

Tanner Sherman is the Principal and Managing Broker of Top Tier Investment Firm in Omaha, Nebraska. He co-hosts the Freedom Fighter Podcast with Ryan of Avara Investments.

The Property Tax Appeal That Saved $8,200 Per Year