April 18, 2024

Business Bib

Business & Finance Blog

How Can You Lower Your Property Tax?

6 min read

Being a homeowner is most people’s dream – who doesn’t want to live in their own space without having to answer to anybody else? It comes with a lot of freedom and security, but it’s not always a walk in the park, unfortunately.

When you purchase a property, you have to start thinking about even more taxes than before. We’re talking about property tax, of course. Taxes are the pitfall of adulthood, so we’ve decided to help you out a little.

Today, we want to tell you how to make property taxes less harmful to your budget. Keep reading to find some of the best tips to help you lower your property tax!

What Is Property Tax?

Before we start giving you tips on lowering your property tax, let’s first explain it. In short, a property tax is a local tax that homeowners must pay on their homes every year. The tax is generally used to fund public services in your area, like schools or roads.

The amount of money each person has to pay differs based on the municipality where they live and the value of their home. If you live in Los Angeles County, for example, and want to find out how your property tax rate is determined, you can do so here: sleeveuphomes.com/how-is-the-los-angeles-county-property-tax-rate-determined.

In most cases, your mortgage company will pay your property taxes for you as part of your loan agreement. They’ll then add the amount to your monthly mortgage payments so that you’re essentially paying them back over time.

What Is Your Property Tax Rate?

Your property tax rate is the amount of taxes you’ll have to pay on your home every year, and it’s based on the value of your home.

The assessed value of your home is determined by your municipality or county assessor, and it takes into account things like the size of your home, the location, any recent improvements you’ve made, and more.

Once your assessor determines the value of your property, they’ll multiply that number by the tax rate set by your municipality to come up with your annual property tax bill. For example, let’s say your home is valued at $100,000, and the tax rate in your municipality is 1%. In that case, your annual property tax bill would be $1,000.

It’s important to note that your property tax rate can change from year to year, so it’s a good idea to stay on top of it and budget accordingly.

5 Tips for Lowering Property Taxes

Now that you know the basics about property tax, it’s time to get into the nitty-gritty. How can you lower your taxes? Let’s see.

Don’t Overdo It with Home Improvement Projects

Home improvement projects are a great way to add value to your home, but if you’re not careful, they can also lead to a higher property tax bill.

This is because your municipality or county assessor will re-evaluate the value of your home after you’ve made any significant changes or improvements. So, if you go overboard with your renovations, you could end up paying more in taxes.

Of course, this doesn’t mean you should never do any work on your home; it just means you should be strategic about it. For example, rather than doing a complete kitchen remodel all at once, you could spread it out over a few years so that your assessor has less of an impact on your property tax bill.

You could also consider making smaller improvements that don’t require a permit from your municipality. These types of projects are less likely to result in a reassessment of your home’s value.

Do You Qualify for Tax Exemptions?

There are different types of exemptions that could help lower your property tax bill. The most common ones are the homestead exemption, the elderly or disabled exemption, and the veteran’s exemption.

Contact your municipality or county assessor’s office to see if you qualify for any of these exemptions. They’ll be able to tell you what you need to do to apply for an exemption and how much it will lower your property tax bill.

For example, the homestead exemption is available in many states and can result in a reduction of up to $60,000 on the assessed value of your home. So, if your home is valued at $100,000 and you qualify for the homestead exemption, your property taxes would be based on a value of $40,000 instead. Not too shabby!

Check Out the Value of Neighboring Properties

One of the best ways to lower your property tax bill is to ensure your home is assessed at a fair market value. Sometimes, assessors overvalue homes in an effort to increase revenue for their municipality or county. Or, they might undervalue homes to entice people to move into the area.

Either way, it’s unfair to the homeowners stuck with an artificially high or low property tax bill. That’s why it’s a good idea to research the sale prices of similar homes in your neighborhood.

If you think your home is being assessed unfairly, you can file an appeal with your municipality or county. You’ll need to provide evidence to support your claim, but it’s worth it if it means you’ll get a lower property tax bill.

Accompany the Assessor on the Walkthrough

When the assessor comes to your property to determine its value, it’s a good idea to be there. This way, you can point out both positive and negative features of your home that you think should be considered.

You can also use this opportunity to ask the assessor questions about the process. It’s essential to be familiar with how your property is valued so that you can be sure you’re getting a fair assessment. And, if you disagree with the assessor’s decision, you’ll know how to file an appeal or get a second opinion.

Participating in your assessor’s walkthrough is a great way to lower your property tax bill. By being there, you can ensure that your home is assessed fairly and that you’re not paying more in taxes than you should be.

Appeal Your Assessment

If you think the assessor has valued your property too highly, you can file an appeal. This is a pretty common thing, and it doesn’t have to be a complicated process.

The first step is to reach out to your municipality or county assessor’s office and request a copy of your assessment. Once you have that, take some time to compare it to other properties in your area that are similar to yours in terms of size, age, and features.

If you think your assessment is too high, you can file an appeal with your municipality. They’ll review your case and determine whether or not to lower your property tax bill. Of course, appealing your assessment doesn’t automatically mean your property tax bill will be lowered. But it’s worth a shot if you think you’re being taxed unfairly.

Understand How Property Taxes Work and Keep Your Eyes Wide Open

As you can tell, there are a number of ways you can try to lower your property taxes and recover your budget. These are just some of the main examples of things you can do if you think your taxes are too high.

The most important thing is understanding the process and keeping a close eye on the details. Don’t let things get past you when you’re reviewing your tax assessment – keep your eyes wide open for any discrepancies. And remember – you can always file an appeal or get a second opinion.