How To Lower Property Taxes: 7 Tips
As a homeowner, one of the expenses that you just can’t avoid is property taxes. Luckily, there are ways to lower them. Let’s explore how.
Can You Reduce Your Property Taxes?
Governments have long used property taxes to provide services throughout the community. A few things that might be funded by your property taxes include public schools, community improvements, and local services.
Of course, the amount you pay in property tax will vary due to state and local government laws. But the amount you pay will be based on the assessed value of the property. A tax assessor will determine the value of your property each year in time for the tax bill to arrive.
When the value of your property increases in the eyes of a tax assessor, you’ll see your bill for property taxes rise. But there are a few ways to lower them, including applying for exemptions and filing tax appeals. We’ll explore how to lower your property taxes so that you can save more money on the upkeep of your home.
1. Limit Home Improvement Projects
Since an increase in your home’s value will lead to a rise in property taxes, it makes sense to limit home improvement projects. When you complete certain home improvement projects, like boosting curb appeal, adding a pool, or revamping a kitchen, the value of your home is sure to rise. And with it, your property taxes.
If you want to avoid an increase in your property tax bill, avoiding home improvements can be helpful.
2. Research Neighboring Home Values
Doing your research about the home values in your neighborhood can pay off quickly. You can often find the value of the homes in your neighborhood as a free resource available to the public. Once you have the information in hand, compare your property’s value to the homes around you.
Look for any discrepancies that don’t quite add up. For example, compare the square footage, number of bedrooms, and outdoor features of the neighboring homes. Let’s say you find out that your neighbor’s four-bedroom home is assessed at $300,000. But your two-bedroom home is assessed at $310,000. The difference could be a mistake by the assessor.
If you find anything that seems like an error, call the assessor to ask. In the worst case, they will stand by their assessment and present their reasoning. In the best case, they will admit to a mistake and lower your property’s value – and your taxes!
3. See If You Qualify For Tax Exemptions
Many state and local governments provide tax exemptions for a variety of reasons. A few common exemptions are for seniors, veterans, homesteaders and certain agricultural uses. Check to see if your property qualifies for an exemption. You might be able to save a significant amount of money by making a call to find out.
4. Participate During Your Assessor's Walkthrough
Instead of allowing the tax assessor to walk through your home alone, take the time to walk with them. In most cases, an assessor will be drawn to the highlights of your home, such as the recent bathroom renovation. But they miss some of the negative features.
When you walk the home with your assessor, point out your home’s positive and negative features. Share the highlights of your new bathroom, but also point out the small defects throughout your house. With a clear picture of your home, the tax assessor can provide a more accurate estimate of your property’s value.
5. Check Your Tax Bill For Inaccuracies
Checking out the tax bill itself can be an easy way to lower your property taxes. You can likely obtain a free copy of your property tax bill from the local government offices. With that in hand, check out the details of your tax bill.
You should ensure that the size of the property and the square footage of the building are accurate. Also, confirm that any extra features, such as land improvements or swimming pools are appropriately reflected.
If you find any issues, talk to the tax assessor. In many cases, they will make the correction for you.
6. Get A Second Opinion
If you disagree with the valuation determined by the tax assessor, consider hiring an independent appraiser. Although it may cost a few hundred dollars, it could be worth it.
If the independent appraiser determines a lower valuation of your home, then you can typically have the assessed value lowered as well. Depending on where you live, a lower valuation could save you thousands of dollars each year.
7. File A Tax Appeal
A tax appeal can be a final option for homeowners that want to lower their property taxes. Although you cannot argue against the tax rate, you could file an appeal with the assessor’s office to change the assessed value of your home.
Unfortunately, this can be a costly process that often requires the help of a lawyer. But it could be worth it in some cases. If you pursue this option, you’ll need to provide details about the condition of your property for review. A board will determine whether or not you win the appeal to lower the assessment on your property.
The Bottom Line
As a homeowner, the costs can add up quickly. Property taxes are one of the things that will never go away. If you’re struggling to cover your property taxes, consider applying tax relief programs, tax deductions, or even a refinance to cover the costs.