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How To Lower Property Tax: 5 Ways to Save on Your Property Taxes

In addition to other costs associated with homeownership, property taxes have to be paid to state and/or local governments every year. Property taxes vary depending on county and location but are generally assessed based on the value of your home and your neighborhood. Property values change over time which will inevitably affect your property taxes.

Can You Lower Your Property Taxes?

Local regulations determine how property taxes are assessed and calculated. Although each local tax department has authority to make such assessments, there are several strategies that homeowners can take to potentially lower their taxes or at least prevent substantial increases. Here are some ways that you can examine your current tax rate and determine how to address and possibly lower the amount of tax that you’ll pay on your home moving forward.

5 Ways to Save on Your Property Taxes

Property taxes are based on your home’s value. While you may never be completely free from paying property taxes, it’s good to be aware of the factors that influence the tax on your home.

1. Review Your Tax Bill

If you feel you are paying too much in property taxes, a good first step is to review the property tax bill itself. Your property tax is calculated by using the tax rate of your state and your county in combination with the value of your home as determined by the assessor. Understanding this breakdown can help you understand which percentage of the tax comes from the set rate for your neighborhood and which percentage comes from your home value.

2. Look for Qualifying Tax Exemptions

Everyone’s tax situation is different. Some common exemptions that may work to reduce your tax bill are applicable for seniors, veterans, homesteaders, or disability.

Many homeowners claim standard household income deductions that lower the overall tax rates. Alternatively, you can itemize deductions on your home depending on your state and local regulations. Nonetheless, it’s worth checking with local and state governments to see if you qualify for an exemption.

3. Limit Your Home Improvement Projects

Sometimes upgrades that you plan for your home can increase your tax rate as they improve the value of the property. If you are committed to preventing your tax rate from rising, consider limiting your home improvements or carrying them out strategically so that your tax rate rises slowly over time instead of drastically all at once.

It’s also worthwhile to focus on home improvements that don’t necessarily boost curb appeal. An assessor’s look at your home is technically objective, but people can express biases even when they try not to, so an attractive home can still be susceptible to a higher tax rate than a home that isn’t as visually appealing.

4. Give a Tax Assessor Access to Your Home

Many tax assessments are performed without an assessor setting foot in your home. Instead, they may walk around the outside of your property. In other cases, they might simply determine a tax rate based primarily on the government records regarding your home, along with previous tax records.

It might feel counterintuitive to allow the assessor to walk through your home. What if they see your new appliances or updated kitching? But don’t worry. It can actually save you money.

Some local governments require assessors to charge a higher tax rate on homes that they don’t have access to. As long as you’ve taken out the necessary permits for any renovations you’ve completed inside the home, allowing an assessor to walk through the home can be beneficial.

Participate in the Home Walkthrough With the Assessor

Even better, participate in the walkthrough with your assessor. They will make their own judgments when they evaluate your home, but there’s nothing wrong with you pointing out certain parts of the home that might lower the tax rate.

For example, outdated appliances or older parts of the structure of the home that look worn can help you entice the assessor to reduce your tax rate. If you’re there with the assessor as they walk through your home, you will also have the opportunity to ask them any questions you have about your tax rate.

5. Appeal Your Tax Bill

Another way to challenge the amount of your property tax assessment is to file a tax appeal at your local tax assessment office. Filing an appeal may cost you filing and legal fees however, if you can assess the savings will be great from a lower rate, it may be worth paying for the appeal.

Filing your appeal with an attorney is oftentimes a good idea. An attorney will draw up paperwork and help you meet the requirements to appropriately file the appeal. You may need to take photos and provide documentation as evidence to include in the appeal as well.

Once submitted, the appeal will be reviewed and will either be approved or rejected. You should determine with your attorney if you have a good reason for the appeal and if it will be worth the cost. Bringing attention to your property without clear evidence that the tax rate is too high might result in a decision by the board to reassess your property, which may result in an even higher tax rate than before!

Lowering Your Property Tax

Property taxes are an inevitable and an ongoing expense for homeowners. Unfortunately, property taxes often rise when you put time and money into your house by way of improvements or when property values in your neighborhood rise.

The most effective ways to lower your property tax bill are to review and understand your tax bill, look for exemptions that you can qualify for, and limit unnecessary home improvements. Work with an assessor to analyze the details of your home, or file a tax appeal.

 

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All material is presented for informational and educational purposes only and should not be construed as individual financial, investment, or legal advice or instruction. ZeroMortgage does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by ZeroMortgage. ZeroMortgage, its affiliates, and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. ZeroMortgage does not provide tax advice. Please contact your tax adviser for any tax related questions.

This page last updated: March 21, 2022