Comments (0)

When To Ask For A Property Tax Reduction

Investing in real estate is a wonderful activity. It allows just about anybody with the right hard work and attitude to create a substantial fortune within their lifetime much easier than many other forms of investing allow for. It’s a great way to build something for the future which everybody wants to do to some degree or another.

One thing that drives me crazy when it comes to real estate investing though is property taxes. Now I should say this right off the bat, I hate all taxes. I know there’s some people that believe we should pay taxes and that we are obliged to pay taxes and that we get the benefits of roads and bridges and security from our army and, blah blah blah I just don’t care. I hate paying taxes!

But that’s not what I hate the most about property taxes, what I really hate is the fact that cities can raise your property taxes for absolutely no reason and they do so all the time. Nothing destroys your business plan quicker than an unforeseen increase in local property taxes.

Luckily there are several things you can do to challenge property tax increases and there are certain times when it makes more sense to do it than others and that’s what I’d like to talk about in this article today.

First off, property taxes are calculated by two things; the tax rate multiplied by the assessed value of the property. You can’t do anything about the tax rate, the town will set that at whatever they want. But you can challenge the assessed value of the property. If the town thinks your property is worth more than you know it is, then you can challenge them and often be successful.

But there are certain times when you should challenge that are more opportune than other times. For instance, you should challenge just before you make any necessary repairs to damages or any forms of deterioration in your property. This should be self-evident. If you are arguing that your property is not worth as much, you can’t very well do that right after you fixed it up. So challenge it, get the taxes reduced, and THEN fix up the property.

Another good time to challenge is when the price that you pay for the building is lower than the assessed value. Take now for instance, we are in the midst of a recession and the country is full of houses that are assessed at high values that are not selling at those high values. If a house is assessed at 0,000 I might buy it for 0,000 today. As soon as I do you can bet the first thing I’m going to do is challenge the property taxes because they will be assessed based on that 0,000 price. And I can prove that the property is only worth 0,000 because that’s what I just paid for it!

Another good time to challenge is when your net income has dropped and you can prove that it has. Rental properties are assessed based on their value, and their value is determined by how much income they produce. If income has dropped, then by definition the value of the property has dropped and you can easily prove that with your tax statements.

So there you have three times when it may be opportune for you to challenge a property tax assessment. Don’t be afraid, get your facts and figures straight and make your case and you will be surprised how easy it actually is to win.

More Property Tax Articles

Comments (0)

There are some reasons why people receive a property tax reduction. Veterans, seniors, and low income homeowners can apply for a tax reduction or a tax deferral. Keep in mind that not everyone who applies receives the reduction or deferral. The state and community you reside in may vary from other states and communities. If you do not qualify, you can ask for installment payments on your property taxes. This is one way to avoid foreclosure and possible auction of your property.

For low income homeowners owners, the county treasure’s office or an online source can supply you with a hardship application. You need to have proof of ownership, income documents, identification and proof of residency. You can also receive information on challenging your property tax increase, obtaining more time to pay, how to obtain relief from property taxes in the future and find information from company’s that offer low income financial assistance.

If you need to apply for a hardship exemption in your state, you must find out the specifics that are required to obtain an exemption. Hardship exemptions are not given to everyone and some states may not offer this service. The hardship exemption may qualify you for a partial exemption or total tax exemption. Your local community however determines this.

The property tax for a veteran who owns a property that is their residence can receive a discount, but they do have to meet certain guidelines. The veteran must have received an honorable discharge. The veteran must have some particle disability and be at least sixty-five or older. Residency requirements might also apply depending on your state. You can apply with your county’s tax registrar to find out if you qualify. Keep in mind that ever community has different guidelines that may be more laxed or stricter for reductions and discounts.

Seniors can apply for a tax deferral specified by the community that they reside in at the time. This tax deferral program gives you more time to pay your property taxes. You do need to meet certain income guidelines and age requirements. Seniors who wish to utilize this tax deferral must talk with the taxing committee and fill out the application. There are also exemptions for property taxes allowed to permanently disabled homeowners. The guidelines for this situation do vary between states, and you need to check with the county clerk for the guidelines and application process.

To summarize deferrals and reductions in property taxes, one would say that low income homeowners can receive a tax reduction, but you do have to meet with special circumstances. Veterans can receive a reduction of taxes, but they may only receive a percentage that meets with the guidelines of the qualifications. Not everyone is going to receive a deferral or a reduction just because he or she falls into one of these categories. It is all up to the taxing committees whether you are accepted or denied. All you can do is apply and wait for a decision by the community committee.

Comments (0)

If you bought your house for $79,000 dollars nine years ago and have never done any work or repairs, is your property still worth the assessed value of $106,000? More than likely, the property is not worth that much for a home built in the early 1900′s. To be honest with yourself, you have to look at other houses with the same age and structure to see if you are paying to much money for property tax.

A property tax reduction is not as easy to obtain, as one would think. If a mortgage appraiser over exaggerated the fair market value price of your home so you could get the refinancing. Could this affect your assessed value? It might not play a big part in the assessed value, but it is considered when rendering the final assessment.

If your fair market value is $105,000 and it was overly appraised, when you try to sell it, you are going to lose money and still have a balance due on a mortgage payment. If a reputable appraiser says your property is only worth $80,000 then you are not going to receive $105,000 for that property. If you property taxes are assessed for a house worth $105,000 and the property is only worth $80,000 on the market, you need to find a tax reduction and quick. You are over paying your taxes by hundreds of dollars in most cases.

The best way to find the true value of your property is to have an appraiser come in, do a full inspection, and give you a report. If this report shows your property is lower than the assessed value and the fair market value, you have something to present to a taxing committee. If you avoid doing this, trying to sell a property that is over exaggerated in price is not going to be easy and when they see the property taxes, potential buyers could decide this is a bad deal.

You should always try to have an assessed value and a fair market value close in range. If it is, then your property taxes should be fair. If the values are extremely different, you need to rectify the issue as soon as you can or you will continue over paying the property taxes. Appealing the property tax bill is one way to see a property tax reduction.

A property tax reduction also comes from applying for a different status on your property tax bill. If you bought a two family home and converted it into a single-family home, you are entitled to a reduction in property taxes, only if you did not increase the value of the property. Single family and two family properties have different tax rates. You can have this adjusted by visiting the taxing authority and filling out the paperwork to change the classification of the property. Once this is accept by the committee, your property will be reassessed and a different tax rate will be used to determine your new property tax liability.