The average American pays around $2,500 in property taxes every year. If someone told you that you could save hundreds – if not thousands of dollars – by following a few simple steps, you would probably take that advice.
Owning a property is usually a great investment. However, property taxes and other expenses can really start to make you feel like you’re spending more money than you should be.
Luckily for you, we are here to help you reduce property taxes and save money. Would you like to learn more? If so, then keep on reading and we will walk you through everything that you will want to know!
Understand Your Tax Bill
If it feels like you are paying too much in property taxes, then you should definitely know how you actually end up with your tax bill every year.
Unfortunately, a lot of property owners pay property taxes but have no idea how those numbers actually come about. Figuring out your tax bill can be intimidating and difficult, especially because each town has its own way of determining taxes.
Your property tax is calculated using the current market value of your property and the tax rate. Tax rates are determined by the federal, state, and local governments.
Your municipality will also hire an assessor who will estimate how much your property is worth. This includes both the home and the land that it sits on. You will then get an assessment.
The assessor might come to your property. However, they also might do it remotely with tax software. Your local tax collector will then send you a property tax bill based on this assessment.
Ask for Your Property Tax Card
Hardly anyone does this but you can actually go to your town hall and request a copy of your property tax cards. The tax card will tell you all of the information that your municipality has about your property.
This card will tell you the type of fixtures within the property, the exact dimensions of rooms, and the size of the lot. Other information can include special notes or features about improvements made to the property.
You should look at this tax card and make sure everything is accurate. You don’t want to pay taxes on something that doesn’t exist anymore. While this sounds like a simple thing to do, many people ignore this advice and end paying more than they need to.
Every time you change the structure of the building, your tax bill is going to go up. Whether you add a shed, guest house, pool, or even a deck, your home is going to be assumed to have increased in value.
Before you build anything, you should speak to your accountant and see how much more in taxes you will have to pay. Groups like WealthAbility are also helpful with this.
You can also speak to local tax and building departments.
Limit Curb Appeal
The more attractive your home is, the more valuable it will be. While this is great if you are trying to sell your home, it is less beneficial when you are still living in it.
A tax assessor has strict guidelines that they need to follow when it comes to evaluating your property’s value. However, there is also some subjectivity involved. This means that a home with a lot of curb appeal is going to be assessed more than a home that doesn’t look as nice.
Remember, your home is basically being compared to the other homes in your neighborhood, especially the ones right next to your house. While it might seem tough, resist the desire to beautify your home before the assessor shows up.
Normally, the assessor will schedule a visit in advance. If it is possible, don’t make any alterations until after the assessor comes to your home.
Research Your Neighbors
As we already noted, information about your property will be available at your town hall. Information about other homes is also going to be available to you.
You should review homes that are similar to yours. If someone has a nicer home than you but they are paying less in property taxes then you can take this up with the tax department.
Assessors make mistakes every so often so don’t be afraid to question anything that looks like a discrepancy.
Walk the Home With the Assessor
When the assessor finally comes over, don’t just let them walk around while you go off and do something else. The assessor might only see the nice stuff, like the granite countertops and chandelier. The assessor might not see the cracks in the walls or the dusty appliances.
Make sure that you walk around the house with the assessor. When you come up to a deficiency, point it out to the assessor to get a fairer assessment.
The Importance of Knowing How to Reduce Property Taxes
Hopefully, after reading the above article, you now understand how to reduce property taxes. By following the steps above, you should be able to get a fairer property tax bill and a better understanding of how the tax system works. Just make sure that you review your taxes thoroughly and try to see how these tips can work with your home.
Are you looking for other educational and useful financial articles like this one? If you are then make sure to check out the rest of our blog today for even more helpful content!