HOW TO REDUCE YOUR PROPERTY TAXES

When most people complain about taxes, they tend to think in term of federal income taxes. Yet property taxes are the stiffest of all, and rising faster than any type of levy.

Many Americans are overpaying their property taxes- needlessly. When faced with an enormous property tax bill, homeowners generally take a defeatist attitude. They think there is nothing they can do about it. Nothing could be further from the truth.

For about 60% of American homeowners, there is sufficient evidence to warrant a tax reduction.

There is wide variety of reasons to justify a tax cut.

There could be arithmetic errors in the records of the local taxing authority or you could be taxed for a two-story house, when in fact you own a one story residence or your residence may be listed as 10 years old when in fact it may be twice that age or the dimensions of your land may be overstated or you may not have been a special exemption to which you are entitled, such as a primary homestead or over 65 exemption or your property values may have declined in your area.

It makes sense to complain about your property taxes when you can demonstrate you have been wrongfully overcharged. More than half of the homeowners who do not protest their assessments get them reduced according to the International Association of Assessing Officers, an organization dedicated to property valuation for assessment purposes.

It isn’t quite as easy as walking into the tax assessor’s office, informing the official that you think your taxes are high and expecting a reduction on the spot.

You must take the time to collect the necessary information that will support your case. Next, you need to present your appeal in an organized, convincing fashion that will leave the tax officials little choice but to agree with your contention that your tax bill is correct.

This approach will take some time, generally between six to ten hours of research and writing. But the time you spend will be well worth your effort. In addition to reducing your tax bill for the tax year in question, you’ll be reducing your property taxes for years to come, since future tax bill are bases upon past records.

Step one: Obtain what is called the tax list. This document, which is available in the local tax assessor’s office, is simply a list of property owners in your area. It list blocks and lot numbers or property identification numbers, assessed values of their properties and what their taxes are.

Next Step: Obtain your own property record card. This document, also available in the tax assessor’s office is the official worksheet that is used to determine the assessed value of your property. It contains information that is unique to your property – the dimensions of the house and lot, a list of unique features, etc. as well as a top view drawing of the residence with dimensions.

Self –defense Take careful handwritten notes on the information you need from the card while you are still in the assessor’s office in case they will not allow you to photocopy the card. Read the information carefully because many times there are errors on the records.

Most Common Errors:

The dimensions of your land are wrong. You may own 1.5 acres, but you are being taxed on 2 acres.

The dimensions of buildings or improvements are wrong. You may have a 1,800 square foot house and are being taxed for a 2,500 square foot house.

The description of the house are wrong. Your house may be listed as being made of brick when it is less expensive frame construction.

The description of your land is wrong. Perhaps the description includes part of your neighbor’s land.

The grade and quality of improvements are wrong. Perhaps you put gravel stones on your driveway, but you’re being charged for a paved drive.

The depreciation factor is incorrect. The assessor may not know the true condition of your property.

Your home may be assessed at a higher value than “ comparable properties”. These are properties that are similar to your own residence in location, age design, size and consecution. Your goal is to unearth data that will support a lower assessed value for your property. Your real estate agent who assisted you when you purchased the home can be very helpful in providing you with this information. Also, the appraiser who performed the appraisal when you purchased the home can help as well.

You want to have your house compared with a twin of your own house that was sold during the current tax year. This establishes the comparable’s “market value”. If you live in a development, for example the ideal comparable would be the house next door that is identical to yours.

To Find A Comparable:

Begin by looking for comparables in your neighborhood, within a few blocks of your home rather than across town. Then compare similar sites.

Compare such items as square footage of living area, number of bathrooms and bedrooms, whether the houses have air conditioning, fireplaces, garage capacity, etc.

Since it is unlikely that another house is completely identical to yours, you probably will have to make adjustments.

After you gather information on 3 comparable properties and take pictures of them if possible, you must come up with an adjusted value for your property and three others. You then take the square footage of your house and the comparables, divide by each property’s adjusted value and come up with adjusted value per square foot for each house. This gives you the basis of which to compare the assessments on all properties. Presumably, your research will indicate that your house has been assessed at a higher value than the three comparable properties.

When presenting your case, remember the rules of successful negotiating:

Let the assessor make the first offer.

Never say yes too quickly.

Don’t be vague about what value is acceptable. Suggesting and supporting a specific assessed value for your property is essential. Without your input, the assessor’s own conclusion may not be satisfactory.

Bear in mind that determining the value of a property is partially subjective. It is an opinion that is supported by facts, but there can be a difference of opinion about those facts. So, to avoid disappointment, recognize that you may not get total agreement from the assessor about the value you are proposing.