Home ownership is expensive. It is something that often causes sticker shock for first-time homeowners. Between regular maintenance and property taxes, the living costs can get a lot higher than they were expecting. However, do you know for sure if you are paying the right amount in property taxes? This article will help you figure out if you can cut down how much you owe the town or city you live in real estate taxes.
1. Check your property’s assessing card.
There is very little you can do about the city’s tax rate, but your property’s assessment is something you should check. Property assessment cards are public, so you should easily be able to access the description that the town or city has of your property, either by looking it up online or by visiting the town assessor’s office directly.
You would be surprised by own many mistakes are commonly made on these reports: some common errors include the square footage of the house, how many bedrooms and bathrooms are included, the condition of the house, etc.
Properties assessment are rarely reviewed if they are in adverse condition: for example, you might have purchased your property as a foreclosure or as an estate sale, and the shape of the house is not as good as it was when it was assessed for the last time.
2.Research the market
The assessed value property taxes are based on is often calculated based on market value. If you recently purchased your property for significantly less money than what it is assessed for, you might be paying too much in property taxes.
If you suspect that your property is overvalued, don’t hesitate to research neighboring properties similar to your own in terms of age, condition, size, number of bedrooms and bathrooms, etc. and see what they are assessed for or recently sold for. Find at least 4 or 5 comparable properties to make your argument.
If you are confident and if the savings you would make on your property taxes justify the cost, don’t hesitate to hire an independent appraiser whose report would make a strong argument in your favor.
3. Investigate which tax exemption you might be qualifying for
You might be pleasantly surprised and find out that you qualify for some property tax breaks, whether it is a tax exemption or a tax credit that you may have to pay back eventually.
Common property taxes exemptions and credits include:
- Seniors, especially those on a fixed or limited income
- Service members and veteran
- People with a disability
However, you might also qualify for a property tax exemption or credit if you are a first-time homeowner or if your property is located on a large piece of land under the homesteading exemptions.
Like all tax related subjects, these exemptions vary by state, localities, and your situation so contact a tax professional, a tax advisor or your local tax authority to find out what you might qualify for.
4. Appeal for a tax abatement
You can appeal for a tax abatement within specific dates depending on the town your property is located.
Before appealing for an abatement, you must be very confident that you will qualify for one. If the tax assessor finds that your property is under-assessed, if you recently made home improvements such as additional square footage or a new deck, for example, you would be at risk to see your property taxes increase instead of going down.
Don’t hesitate to walk with the tax assessor to indicate any adverse conditions, like a noisy highway or a nearby factory.