How to Cut Your Property Tax with These 10 Tips
No one likes paying property taxes. Well, really no one likes paying taxes of any kind. But, we all know it’s a requirement. But, that doesn’t mean there aren’t ways to cut your property tax obligation.
Property taxes are paid to your county, and in some cases the city, and school district, where your home is located. Additionally you may have to pay property tax on other valuable property, such as vehicles. The amount of tax due is decided by a variety of factors. These factors include, levies by school boards, town boards, legislators, and councils.
The amount of tax due on property is assessed by the local governing county, or city administrator. The assessment are based on the cost of property in any given area. The way that the governing assessor values property is made by studying and comparing a set of criteria. These criteria include, but is not limited to: the current sale prices of properties in the same area, the current cost that might be associated if a property needed to be replaced, the the historical significance or the property, and any potential value of the property if it were to be used for rental, or is sold, or if it were given as a gift to another person.
The rate of taxes is set by the assessor who determines the funds needed for the government, or governing body, to function. Individual taxes are calculated by multiplying the given tax rate for the area with the assessed value of your property, and then applying any deductions that might apply.
Currently, housing prices are up due to a decrease in unemployment, and a low supply of available housing. With the increase of the price of housing comes an increase in the rate of property tax as well. This is because the assessed value of homes has increased to match the current housing market.
Owning property that was part of an inheritance can also affect your taxes. Therefore you should understand how inheritance tax works.
Learn more about property taxes for your state:
Ohio Property Tax
West Virginia Property Tax
10 Ways you Can Cut Your Property Tax
1- Knowledge is Power
Tax assessment laws are public property. Therefore, you as a tax paying citizen have a right to know the laws regarding your property tax assessment. You can request copies of current laws via your county tax assessor’s office. Or, check their website, often this information is made readily available online. These manuals will give you clear indication of how the property tax is assessed, what you can do to reduce your tax burden through rebates, credits, and deductions. It will also show you what to do to complete an appeals process in your county.
2 – Joint Ownership of Property
When you own property with a spouse, family member, or any other person, both owners would share eligibility for any rebates, or caps allowed for property value and assessments. For example, if one owner is older and meets the eligibility for an elderly tax cap, but the other owner isn’t of age to meet that elderly tax cap, then as joint property owners the assessed tax should be allowed for the older of the two property owners.
3 – Verify that Your Property Tax Assessment is Correct.
You have the right to ask to have your assessment report verified. You want to check to make sure there are no miscalculations, assumptions, or mistakes made in the report. You can also appeal the tax assessment by making the request with the county tax assessor’s office. Be sure to check your county’s website to determine what the appeals process is.
4 – Property Tax Rebates
Often, counties or states will offer rebates to home owner who meet certain criteria. Sometimes, legislators and county governments will grant property tax rebates to homeowner who install energy savings devices, or to those who fit specific economic criteria. Some states, such as West Virginia offer rebates, to the elderly on their county property tax.
5 – Check for Exemptions
Ensure that all allowable exemptions, according to the law, have been properly applied to your property tax assessment.
6 – Verify that your Assessment is Comparable to Properties in your Neighborhood.
Because property values are calculated by the current costs of properties in your area, your tax assessment should be similar to those of your neighbors. You can check both with your county assessors office, and your neighbors to verify you are paying a similarly priced tax. It helps to know the laws governing tax assessment in your county, but you should be able to find that information on your county assessor’s website.
To get a customized value on your personal property, you can work with a real estate professional to file a property value report. Often, this is offered as a free or low cost property value report. You also can have a professional appraisal done by your bank. Once you have all the correct documentation for your property’s actual value, you can appeal your assessment with evidence in hand of what the actual value of your home or property is.
7 – Hire a Property Consultant to Help you Save Property Taxes.
A Property Consultant does careful market analysis of a given property. Once the analysis is complete they can give advice to the client on how to proceed with the purchase or sell of a piece of property. Because they have expertise in market analysis they can give you in-depth insight as to the true value of your property and help you to determine if your assessed value is correct or incorrect.
8- Check Your Home Loan Provisions
It may be possible for you to get a loan refund on property taxes paid out of pocket. This is because some loans have provisions for property taxes within the contract. And, often mortgages have automatic escrow to pay property taxes. So, if you find yourself paying out of pocket for property tax and discover that you have an escrow fund for paying taxes the loan company may be able to reimburse you for what you have paid.
9 – Know Before You Buy
Before buying a home or property, do some research to determine what the current tax rate is. Also, look and see what the rates have been on the property over the past ten years. This comparison will help you to see if there is a rise in value, or a decrease in property value. You then, can make your buying decision knowing where you’ll be when it comes to paying your property tax, and can save and prepare accordingly.
10- Join Your Neighbors in Combating Over Assessments
They say, there is strength in numbers and in this case it’s true. If you and the other homeowners in your area feel that there is an over assessment of the property value in your area, work together, rather than individually, to ask the county to reassess overall value for the neighborhood you are in.
The best way to prepare for paying your property tax is knowing your assessed value each year, planning ahead to ensure you have budgeted the proper amount to pay the tax. But, you can also be confident enough to request an appeal if and when it may be necessary. Knowing how to cut your property taxes when the time comes is a good idea for anyone who is a property owner.
This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.
