Personal Finance
Property Taxes Are Rising: Here's What You Can Do About It
As a homeowner, one of the things you just can't avoid is paying property taxes. Fortunately, there are some ways to lower your bill.
If you own a home, you are well aware that your mortgage isn’t the only monthly payment you have to worry about. You also have to pay property taxes — real estate taxes calculated by local governments based on the value of your property.
As a homeowner, an increase in your home's value might sound great. But if the assessment of your home increases, so do your property taxes (which isn't so great). If you ask most homeowners about their property taxes, they'll likely tell you they pay too much.
Fortunately, there are some things you can do to lower your property tax bill. In addition to tips such as better understanding your tax bill and avoiding home projects that might add value to your home, consulting with a professional from Newrez is a great way to help determine the best course of action. Read on to learn more about lowering your property taxes and saving some money.
Understand Your Tax Bill
Think you’re paying too much in property taxes? You may be right. But, unfortunately, many homeowners don’t understand how their property taxes are calculated. That’s why it's important to know how your local governments reach those figures on your bill.
Property taxes are calculated using two important figures — the tax rate (the percentage at which an individual is taxed) and the current market value of your property. Local governments set their tax rates based on what they feel they need to pay for important services. An assessor, hired by a local government, estimates the market value of your property.
In order to calculate your tax bill, your tax office multiplies the tax rate by the assessed value. For example, if your property is assessed at $300,000 and your local government sets your tax rate at 2.5 percent, your annual tax bill will be $7,500.
Review Your Tax Card
Did you know that you can obtain a free copy of your property tax cards from the local government offices? Checking out the details can be a simple way to lower property taxes. This card includes information about the size of the lot, the precise dimensions of the rooms, the number and type of fixtures located within the home and any special features. Mistakes are more common than you might think, so make sure everything is accurate. If you find any discrepancies, raise the issues with your assessor. Your local government is obligated to make corrections.
Look At Comparable Homes In Your Area
Doing your research about the home values in your neighborhood can pay off quickly. It’s typically easy to find the value of homes in your neighborhood online, as it is often public information. Compare your property’s value to the homes around you, looking specifically at things such as square footage, number of bedrooms, outdoor features and more. If you see any discrepancies, call your assessor to ask. Worst-case scenario: They stand by their initial assessment and provide reasoning. Best-case scenario: They admit to a mistake and lower your property’s value — and your taxes!
Don’t Build Or Boost Curb Appeal
While home improvement projects — such as adding a pool or remodeling your kitchen — will surely increase your home’s value, they also increase your property taxes. Furthermore, adding some curb appeal to your home may mean a higher assessed value than homes that are less physically appealing. That’s why it's best to limit home or outdoor projects if you’re looking to lessen your bill.
If you plan to do some remodeling, be sure to find out how much of an increase a new addition or project might mean to your bill before starting any construction. Call the local building and tax departments, which will be able to give you a rough estimate.
Walk The Home With Your Assessor
Instead of allowing the home assessor to walk through your home alone, be sure to walk the home with them. If unguided, some assessors may only see the good features in a home and may overlook any issues. When you walk the home with your assessor, point out your home’s positive and negative features. This will help your assessor provide a more accurate assessment and ensure that you receive the fairest possible valuation for your home.
Look For Exemptions
Many state and local governments provide tax exemptions for a variety of reasons. You may qualify for an exemption if you fall into any of the following categories:
- Seniors
- Veterans
- People with certain disabilities
- Agriculture properties
- Homestead exemptions
Check with your taxing authority to see if you qualify for an exemption.
Appeal Your Bill
As a final option, homeowners can file a tax appeal to lower their property taxes. This option can be costly and may require the help of a lawyer, but it can be worth it in some cases. Your lawyer will go through the steps of the appeal and provide what information is required. The board will then review this information, compare it to the most recent assessment and tax bill, and make a decision whether to lower the value of your property.
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