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Steps to Reduce Your Property Taxes: Killer Tax Tips

By Bill Gassett | December 3, 2022

How to Lower Your Property Tax Bill

Challenging your property tax assessment isn't easy, but it will be worth it if you win a significant tax break. You will never know until you give the appeal process a shot.

Did you just receive your property tax bill in the mail and were shocked at the amount of taxes you're being charged? You're not alone. Many folks feel precisely the way you do.

Over the last few years, real estate values across the US have skyrocketed. Along with the increased values of homes comes a higher property tax bill.

Property taxes are one of the most significant expenses that homeowners face. Property taxes can be an enormous burden on a homeowner's budget and can often be challenging to reduce.

With property values increasing so much, it is not surprising that homeowners are scrambling to reduce their assessment tax.

Let's have a look at the steps you can take to potentially get your property taxes reduced.

Reduce Property Taxes
How Do You Reduce Your Property Taxes?

What Are Property Taxes?

If you've never owned a home before, you're probably not an expert in how property taxes work. A property tax is a fee levied on a property's value. The tax is calculated as a percentage of the property's assessed value.

Cities and towns will use the assessed value combined with the local tax rate in order to calculate the property taxes due on a property.

Municipalities need to take in a certain amount of money each year to ensure running the community can run smoothly.

Property taxes are used to pay bills generated by a city or town. For example, schools, roadways, and public building maintenance are three of the more common things that property taxes pay for each year.

Three Significant Factors in Property Tax Assessment

Three things will have a significant impact on the assessed value of a home. These factors include the home's square footage, the property's acreage, and the outbuilding on the lot.

It makes sense that larger homes command more money from a market value standpoint. The size of the lot also has a significant impact on property taxes. In fact, it is much more than how it impacts market value.

Lastly, external amenities such as a swimming pool, cabana, storage sheds, or detached garages can heavily influence the assessed value.

How to Reduce Your Property Tax Bill?

Whether the city or town values your property appropriately or not often arises. On many occasions, they do not. In these circumstances, property owners will often challenge their tax assessment by filing an appeal.

Let's have a look at how to go about getting your property's tax bill reduced.

Is The Tax Assessment Correct?

It is essential to review your tax assessment for accuracy. If there has been a change in the value of your property, you will receive notification of this via mail.

If an unexpected increase in the assessed value appears to be unfounded, it is advised to contact the local assessment office for further information. In some cases, a detailed explanation of the value calculation can be provided.

Carefully examine the data and look for any inaccuracies. Have any upgrades been incorrectly factored into the assessment? Is the square footage precise? Are the bedroom and bathroom counts correct?

Correcting facts on an assessment may result in a lower assessed value, thereby resulting in lessened property tax payments.

When you get your property tax bill, you must jump on contesting your assessment. Most cities and towns have a window of time in which you'll be able to file a tax appeal.

In many areas, the tax assessor has not been inside your home for an extended period of time. When that is the case, there is a more substantial likelihood that something could be amiss.

Getting home values wrong is not uncommon.

When Filing a Tax Appeal, Research Assessed Values of Similar Homes

When filing a property tax appeal, it will be essential to be armed with accurate information to make your case.

When searching for comparable homes in your local area, ensure the lots, square footage, and amenities are similar.

For instance, research properties with nearly identical features if you have a three-bedroom home on a one-acre lot with 2200 square feet and three bathrooms. It is essential to understand how comparables work when making adjustments to value.

Individuals can look up the assessed value of their homes in public records at city hall. If all similar homes in the area are valued at approximately $500,000, and your home is valued at $575,000, there may be an issue.

Your Improvements May Have Added to Your Assessed Value

Keep in mind if you have made recent improvements to your home and filed a building permit, the local assessor has this information.

For example, if you replaced your roof, added a swimming pool, or installed a tennis court, these improvements will bump up your assessed value.

File a Formal Tax Appeal

Once you have gathered your property tax appeal information, it will be time to start the process of filing a claim.

The process for filing a property tax appeal may vary by region. Individuals should review their property tax assessment letter to determine if there are any options or instructions for appealing the assessment amount.

To gain further insight into the process, contact the assessor's office and the property tax office of your municipality.

When submitting paperwork for assessment, individuals may need to present pertinent documents, including independent assessments and comparative market analyses (comps), which are the estimated values of properties with similar features in the vicinity.

If you are unfamiliar with getting appropriate comparable sales, you can ask a local real estate agent or appraiser for help. A real estate agent can do a market analysis, and an appraiser can provide an appraisal.

A real estate agent may provide this service for free, hoping it will help them get your business in the future. An appraiser will charge you for providing the appraised value of your property.

Keep in mind that assessed values and appraised values are not the same.

What Happens if The Town Assessor Won't Change The Tax Assessment?

When cities and towns are unwilling to change the tax assessment, you must file an appeal with the state. You can get information on this appeal process by asking the assessor or doing an online search.

Final Thoughts

Challenging your property tax assessment isn't easy, but it will be worth it if you win a significant tax break. You will never know until you give the appeal process a shot.

Bill Gassett is an authority in the real estate industry with 38 years of experience. Bill is well respected for his informative articles for buyers, sellers, and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Newsbreak, Credit Sesame, Realty Biz News, and his own authoritative resource, Maximum Real Estate Exposure. He has been on of the top RE/MAX agents in New England over the last two decades.
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