Homeowners find property taxes frustrating, but unfortunately, you will inevitably have to pay for them every year – even after you’ve paid off your mortgage. Fortunately, if you find your tax bill excessive, you may be able to lower it. Here’s how:
What Exactly Is Property Tax?
Property tax is a yearly payment paid by people, corporations, etc. who own real estate. As an ad valorem tax, the amount due is determined by the property’s value. According to Mortgage Calculator, the average household pays around $3,719 in property taxes per year. The taxes that you pay will be used to pay for the construction of community facilities and cover the cost of certain public services.
1. Don’t Construct Structures
If you don’t need to construct a property structure, don’t. The construction of structures can increase your rental rate (because it increases the value), but it can also raise your property taxes. Structural constructions that can raise your taxes include permanent structures, for example, a patio or large storage shed.
If you really want to construct a new structure on your property, be sure to consult a property management company or contractor. They can provide you with an estimate of how much it will increase your property’s value.
2. Curb Your Property’s Curb Appeal
While tax assessors have to follow a specific set of standards, there will still be some subjectivity in the evaluation. Properties with visual appeal will have a greater value than those that are not as appealing. This is because your property will be compared to your neighbors’ properties.
It can be tempting to conduct improvements that boost your property’s curb appeal, but if possible, try to resist the temptation. Postpone any “cosmetic” changes to the property (those that are sure to increase its value) until after the assessor’s visit. As a rule of thumb, your home shouldn’t look brand-new.
3. Research Property Values
It is possible for the assessor to be wrong when it comes to your property’s worth. Fortunately, property values are readily available, and you can do your own homework. Once the assessor provides you with their assessment of your property’s value, compare it to the value of other properties in your community. A property management firm should be able to help you obtain this information, should you need their help.
Be on the lookout for discrepancies that don’t add up. Be mindful of the number of bedrooms, dimensions of the home, and more. For instance, if you find that a neighbor’s three-bedroom home was valued at $300,000, but your two-bedroom home was valued at $350,000, this should raise red flags. Unless your property has stand-out features that make it more valuable than your neighbor’s (e.g. a pool), it’s likely a mistake.
Be sure to bring this to the attention of the assessor so they’ll be able to reassess it.
4. Walk the Assessor Through Your Property
Do not allow the tax assessor to walk around your home unaccompanied, and instead, accompany them everywhere. It’s not uncommon for an appraiser to be drawn to your property’s “pricey” features, such as brand-new countertops, a bathroom makeover, etc. As a result, they will likely overlook the bad parts of the property, like the broken tiles, cracks in the walls, etc.
Try to explain any new property improvements, and point out the flaws of the other parts of the property. If you remodeled the bathroom, tell them about the benefits, but don’t focus only on the “good” parts of the property. For example, you can subtly talk about the flaws, as well. The tax assessor can more accurately calculate your property’s value if you provide a detailed overview of it.
If you can’t recall what improvements you’ve done to your property, it would be best to consult your property management agent prior to the visit.
Pro Tip: Whatever you do, do not disallow the assessor to enter your property. If you do, they will assume that want to conceal the fact that you’ve improved the property.
5. Get a Second Opinion
If you have doubts about the assessor’s assessment, you can get a second opinion from an independent appraiser. It can be costly, but it will be worthwhile if there truly was an error. If you find that your property is worth a lot less, don’t worry – you can (and should) challenge the assessor’s original assessment.
6. File a Tax Appeal
A tax appeal is the last resort for homeowners who want to lower their property taxes. While you won’t be able to contest the tax rate, you will be able to submit a tax appeal to the assessor’s office to have your property’s value reassessed.
The downside is that this tends to be an expensive process, as you will need the assistance of a real estate attorney. If you do decide to file an appeal, you will need to provide an overview of your property’s current condition (similar to a property inspection). Then, a board will decide whether or not they’ll be able to lower your tax bill.
Bear in mind, however, that an appeal is not a guarantee that your bill will be lowered. In some cases, your bill can even increase if the board finds that your property is actually worth way more.
7. Verify If You Qualify For Tax Benefits
Some states provide property tax breaks to seniors, veterans, etc. Don’t forget to check state-specific tax regulations to see whether or not you’re eligible for any tax exemption. Bear in mind that taxes are controlled at the state and local levels, so related laws will vary based on where you live.
Need Help With Property Taxes?
Taxes can be a complex topic, which is why we’re here to help. At Luxury Property Care, our competent team of real estate lawyers, accountants, and experts are more than ready to help you when tax time comes. Not only will we calculate your property’s accurate value, but we’ll also assist in case you want to file an appeal.
For more information, contact us at (561) 944 – 2992 or complete our contact form today.
