Real Estate Tax Tips
It’s that time of year again! Here are a few tips to help when filing this year.
The most hated tax
Did you know you can fight back if your real estate tax bill is unfairly high? Your property’s assessment should be close to those of comparable properties in your neighborhood. (The assessed value multiplied by the tax rate determines your tax bill.) The National Taxpayers Union estimates that 20 percent to 40 percent of those who petition for a lower assessed value get a reduction. Here’s how to make your case to the local assessor or the board of appeals.
Pay your taxes
In most localities, in order to preserve your right to appeal your property tax bill, you must have paid in full.
Mind the appeals window
Learn the timing of everything. You may only have 25 days after you get your tax bill to file your initial petition, and then only a few days until the actual hearing. Watch out also for picky rules about when you have to submit evidence, sometimes in advance of the hearing.
Find the assessment date
It could be Jan. 1 or Oct. 1 or another date. In any case, there is a time lag between the assessment date and the date you get your tax bill. If your property has gone down in value in that time period, that doesn’t help you. It’s the value as of the assessment date that matters.
Determine the assessment cycle
Some localities reassess properties every year, while others are on multi-year cycles, meaning a new assessment stays in place for several years. Winning a reduction in the first year of a multi-year cycle helps lock in the lower assessment and tax savings for longer. Watch out: Some localities reassess your property and then phase in the new assessment over several years.
Find the fraction
Your assessment represents a specified fraction of fair market value, ranging from 4 percent to 100 percent. If you’re in a jurisdiction that assesses at 70 percent of market value and you just glance at your assessment, assuming it’s a 100 percent assessment, you might think it is fair, when it’s not.
Locate your property tax card
Most assessors’ offices have files stuffed with property tax cards, which contain assessment details on each house. Sometimes some or all of this information is online. Check for errors in square footage, year of construction, number of baths, or some overlooked situation (like a shared driveway) which should lower the value of your land.
Find comparable properties
In most states, your neighbors’ property tax cards are public records and available to inspect. In all cases, the assessments are public record. You can ask a real estate agent for a list of comparable property sales. The websites Zillow.com and Trulia.com also have historical sales and assessment information.
Consider hiring an expert
Property tax consultants will take your case, usually for 50 percent of the first year’s savings. Alternatively, check out the online service, ValueAppeal.com, which charges $99 to help you find comparables and to guide you through filing an appeal. If you’ve refinanced recently, you may be able to use the appraisal as evidence.
Look for homestead breaks
Many localities have exemptions, lower tax rates or lower assessment ratios for folks who are full-time residents and have lived in their homes a certain number of years. Appeals related to exemptions are often heard first, leaving you little time to prepare your case.
Search out other exemptions
Most localities have breaks for seniors, the disabled and veterans. Often these are enacted at the state level, and localities set their own income limits and other requirements. You need to apply for these. If you’re not sure your assessor is giving you a fair chance, social service or veterans’ agencies can often help.
Keep these tips in mind and good luck saving when filing this year!
