7 Strategies to Lower Your Property Taxes

According to a recent analysis from the National Taxpayers Union, as much as 60 percent of the nation’s real estate is over-assessed. That means, if you own business or residential property, there’s a reasonably good chance you’re paying too much in property taxes.

There are several reasons for this state of affairs. For one thing, when real estate booms, assessments increase. When real estate values fall, however, assessments typically don’t follow suit, because they occur infrequently. In addition, local governments have little incentive to reduce property taxes, since they directly benefit from those revenues.

Can You Challenge the Appraisal District and Win?

Most homeowners and small business people simply assume there’s nothing they can do to lower their property taxes. Although it’s true that the process is neither simple nor automatic, many property owners have been successful in reducing the amount of their tax assessment and the property taxes they pay.

To increase your odds of success, you should adopt these seven proven strategies to avoid paying more in property taxes than you need to:

1. Find out how your taxes are calculated: Different states and localities assess properties differently. You can’t challenge your assessment if you don’t know the formula used to create it, so check the rules for your state.
2. Review your bill for possible mistakes: Your bill should list your taxes from last year and this year. Make sure these numbers are accurate. If they’re not, visit your local assessor’s office. (You might be required to file a petition for a hearing.)
3. Make sure your property specifications are accurate: Assessors sometimes make mistakes. For example, they sometimes estimate internal square footage based on external observations. If necessary, work with a surveyor to ensure external dimensions are accurate as well.
4. Be aware of the surroundings: The area that surrounds your home or business impacts its value. For example, if you’re near a sewage treatment facility or dump, the unpleasant smells associated with these will make your property less valuable. Similarly, if you’re near enough an airport that sounds are an issue, your property isn’t worth as much. These negative factors (called external obsolescence) should have been taken into account when your property was most recently assessed. If they weren’t, you need a new assessment.
5. Be aware of layout problems: Your home or business is also less valuable if there are problems with the layout, sometimes referred to as “functional obsolescence.” For example, if you have a large four-bedroom home with only one garage, or you need to go through one bedroom to get to another one, your home is worth less money. Make sure an assessor is aware of these issues and accounts for them in their assessment.
6. Know what your neighbors are paying: Find out if your neighbors with similar homes are paying substantially less in taxes than you. It’s possible your home was assessed when home values were unusually high, while theirs were assessed when values fell. Do your research and take it to the assessor’s office to argue for a lower rate.
7. Get an appraisal: For about $300-400, you can get your home appraised. If the appraised value is significantly less than the assessed value, you’ll have objective evidence that something is wrong. That’s evidence an assessor will tend to accept.

Conclusion

The process involved in lowering your residential or business property taxes is, admittedly, complicated. To increase the odds of your success, your best bet is to engage an experienced property tax attorney who knows the ropes. The best property tax attorneys will possess the advocacy skills necessary to fight aggressively on your behalf. Considering how much money lower property taxes can save you, it’s an investment you won’t regret.