There’s not a whole lot that’s good about declining property values – but there is one opportunity that it presents: Property Tax Reductions.
As any property owner or investor knows, the government makes an income on every inch of real estate in this country by assessing property taxes. Generally done at the local level, property taxes are ostensibly to pay for local urgent needs such as public education.
In some places, property taxes reach into the stratosphere and become a very significant part of the expense of property ownership. But there is good news:
Since property taxes are generally based on property values, the declining property market appears to give property owners an opportunity to save some money on property taxes. However, local governments will not merely reduce your property tax bill. Instead, there’s a process that must be followed to make this happen.
I’m not an expert on property tax reduction. But I will share a few points with you (and a great resource) that my research has uncovered:
- Get Your Most Recent Property Tax Assessment and check it for errors. Does the number of bedrooms and bathrooms match your actual property? Is the square footage accurate? Errors in property tax assessments are very common, and an error can be a great basis for requesting a re-assessment.
- Compare To Your Neighbors. Property tax assessments are public information, and you should confirm that neighbors with similar properties are paying similar taxes. If they are paying less than you, you should seek a re-assessment.
- Ask for Reassessment. To make this successful, you’ll need legitimate evidence such as the information you’ve collected above. Additionally, a certified appraisal could help to drop your property value analysis and therefore your property taxes.
Property taxes are the life blood of most local governments, so don’t expect the property assessment people to willingly cut your tax rate. You do need to be armed with proper evidence, and frankly some knowledge about the process wouldn’t hurt you.
The information I’ve provided above will give you a good starting point. You can also call a local attorney or real estate appraiser for additional advice. Finally, a good e-Book about property tax reductions is here.
Thank you for visiting FreeRealEstateTraining.com!
Hi Bryan,
This is not related to your posting today but I thought I would draw your attention to the ‘Federal Bail out’ details.
The 4-page summery and entire 600+ pages text is available on Yahoo.
It does not seem to be as bad as was previouslt thought.
Please check them out. Your readers will also find them interesting.
Thanks,
Raj.
Thanks for pointing these things out to us. I’ve reproduced the content mentioned above here on FreeRealEstateTraining.com:
1. Summary of Housing and Economic Recovery Act of 2008
2. Full Text of the Housing and Economic Recovery Act of 2008
Hope this is helpful! — Bryan Ellis
In my county in Ohio, the officials pre-empted this strategy by
saying that tax values would remain the same during this housing
value episode.
That’s really interesting. Which county are you in? That seems ripe for a legal challenge, though that doesn’t seem likely. — Bryan Ellis
My brother just got his property value lowered 12% in Dallas Texas suburb. In California we passed prop 13 years ago that locked in the value of the home when you purchased it. This has saved many from being taxed out of their homes by rising values. Those that bought at the peak could still challenge their values.
One very effect method of reducing your property taxes is the same method one should use to buy a house. Do a list of comps; hedge your comps by only using REO sales. Make sure you use houses of similar age, square footage, and close by.
Most areas will have plenty to choose from, do not include all the houses just the ones that will help you. Only use the last three months sales, anything further back is just a pipe dream or nightmare depending on how you view it.
Find out how your counties property tax appeals process is written and make sure you follow it exactly. Often when you go in front of the board, they will try to lead you astray during the hearing. Take your information with you and stick to it, make them stick to it also. Many boards will try to put you off but they will follow procedure if you have it written in front of you and can quote when they are leading things off track.
If you are well prepared, you will most likely win! You do not need an appraisal, you do not need an attorney, (at least not the first attempt), you do need to present your information in a professional manner and not let emotion enter into what you are doing. Be honest and sincere, present your facts clearly, and be well prepared.
Remember if you lose most of the time, you can go back in a few months or the next year. It will be worth your time to go back the next year. Each time you do the process, you will be better at it and values will keep falling for the foreseeable future.
Good Luck,
Chris B