There are a few different options for homeowners when it comes to receiving assistance with their property taxes. You can challenge your local government, town or city hall on your property tax bill, and this is done by contesting the assessment. Many states and local municipalities also offer homestead exemptions or deductions for seniors, disabled, or people facing a hardship.
When it comes to your property taxes, homeowners will have the most success when they are pro-active. This means challenging your assessment, looking into deductions, applying for senior freezes or exemptions, and exploring any local government assistance programs. Meet with your local town representatives or assessor and see what type of resources they may offer. The process can take time, so you need to also plan well ahead in order to receive relief on time. All of this needs to be done before you miss a payment and before you fall behind on your property taxes. Read more property tax exemptions.
If you currently owe money on your taxes to a local municipality, then your options are limited. Some towns and counties may work with homeowners, but it is not that common. Find how to get help with delinquent property taxes, including information on installment plans.
Historically property tax increases were largely the result of rising home values. However more recently, with the slow housing market, many real estate tax increases are the result of the increase in tax rates set by local governments and assessors. While you can’t do much in regards to the rate, one thing you can do is now that property values have gone down in most markets or are flat at best, there is a good opportunity to save money on your property taxes. Different formulas are used by local governments to calculate property taxes, but the bottom line is that the amount you need to pay in property taxes depends on a home's assessed value, and in today’s market you may be able to challenge that assessment.
The National Taxpayers Union has estimated that over 60% of properties in the United States are overassessed, so people are paying too much in property taxes and these individuals need help. However, despite these growing property tax bills, less than half of homeowners will ever protest their assessments. That means most people are needlessly paying more in property taxes than necessary. The bottom line is that the appeal process is not as challenging or difficult to do as many homeowners fear.
If you really do not have the time to challenge your bills, you need to hire an attorney or property tax consultant to do the work. Most of these folks charge on a contingency basis, which means that they work for free, and they will not charge you a fee for their work unless they save you money. In that case they will only charge you a percentage of the annual property tax savings if they succeed in lowering your assessment. You should always try to hire on a contingency basis, and not someone who charges a flat fee or bills you hourly. If you enter into this type of arrangement you do not need to worry about paying a consultant’s bills or hourly rates unless you win.
The highlights of the appeal process is as follows. Or you can view a step by step guide to challenging your property taxes. More.
You first need to establish your timeline. What month do your local assessments go out? When is the cutoff for appealing? You can quickly call your local tax assessor's office for help getting this information.
The appeals process and deadlines vary from locality to locality. So does the amount of time that you are permitted to file an appeal. Sometimes a homeowner may have as few as 30 days to file an appeal. In other areas, you may have up to 120 days.
Tax bill mistakes are more common than you may think. Homeowners are responsible for catching the error and you need to point this out and not pay for errors. Most assessors do not even visit your property to inspect it. They instead rely on and compare a description of your house with that of similar homes in your neighborhood.
Also, appraisers may very well use historical information that is incorrect to calculate your property taxes, and if they do, then you are paying too much. As an example, a houses square footage might have been incorrectly stated or calculated on the original construction documents.
Another common error. An assessor may have a slightly different thought process than you do of your home. For example, the local tax assessor may be counting a screened in porch as a year round living area and you only use it in the summer, so you may be paying high property taxes for something that is incorrect on the assessment.
You need to check the number of bedrooms, bathrooms, and everything else about your home with what the assessor has on file. Never forget any modifications you have made. For example, if you have torn down a garage in order to increase garden space, your home's value likely will have decreased.
Your assessment may be higher than comparable homes. The second way to contest a tax assessment is to review how your home compares to other, similar houses in your neighborhood. Similar and comparable means homes of the same age, size, and general location.
For example, Mr Smith may live in a 550-home subdivision in Texas. But even within that large subdivision, there are absolutely differences that affect value and you need to help point this out to the assessor. A home near a busy road, or an entrance, in the community should be valued less than those on a creek, so the taxes paid need to be less.
You can find information on comparable homes and their assessment and values at the assessor's office. If you do not want to do this work yourself and need help, then hire an attorney, property tax consultant, or even a realtor. Get tax data on five to ten comparable homes and see what they are paying for taxes. This is public data and is at the assessors office, and by law, they need to help show you how to do the research.
Once you have your data, go over the numbers and then you can decide whether you have a case. If your data shows that your assessment is higher than comparable neighbors homes, then you are paying too much in taxes. You need to contact your local assessor's office and you should first try to arrange a one-on-one, informal meeting. You can write the, call, or stop by their office. If you decide to write your assessor, find an example of a letter used to appeal your property taxes. More.
Many times simply communicating with the assessor and pointing out the data and facts can be enough for the assessor to lower an assessment and your tax bill. Read how a record number of homeowners are successfully challenging their home assessment.
Some studies show that over 80% of cases are resolved through informal negotiations. However, just be aware that when you informally meet with your assessor, it truly is a negotiation. You may end up with a higher valuation than you would like, but it would still be one that is lower than the assessor's original appraisal, and no matter what a lower assessment will help you save on property tax bills.
If the local tax assessor will not meet with you (also note that some areas will not permit informal meetings), or if you do meet but still fail to reach a fair agreement, the next step you need to take is to protest the tax assessment.
Ask the tax assessor what the procedure is and what the deadlines are to file a protest in your town or municipality. The assessor needs to help you with those questions. Be sure you follow the guidelines to the letter of the rules to ensure against your appeal is not dismissed due to a technicality.
Before your hearing, gather all your data, stats, and evidence and put it into order. For example, you may want to put the market stats and data into a spreadsheet or format that makes it easy for the officials to see the basis of your argument, and you should strongly consider collecting photos of comparable properties and their property taxes. Your presentation doesn't have to be as polished as a top notch lawyer, but being, and showing that you are organized, will help you put on the strongest possible case. It will increase your chance for success. Find out what percent of property tax challenges are successful. More.
Another idea is to consider sitting in on somebody else's hearing before your appeals date as you can see how the local board operates. You can also get a sense of what arguments don’t work, and those that do work.
Even if the board doesn't rule in your favor despite your compelling presentation, you can always take your case to court, but in many cases it will cost you more in fees and attorney bills than the amount of tax money you might save. Many states also have a state appeals board where you can state your case if the local panel rejects your petition. It is important to stay professional and composed throughout the process.
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