79. Save $1,000s per year – 3 ways to reduce your property taxes
Save money on property taxes. Many property owners are looking for ways to reduce property taxes. This is because changing property market conditions as well as other factors make it more likely than ever before that property tax assessments are not accurate.
If you are one of the many property owners who suspect your property tax assessment is in error, keep reading to learn 3 easy ways you can reduce high property taxes.
But first, why are property tax reductions necessary in the first place?
Some people believe incorrectly that their property taxes are calculated by well meaning officials who seldom make mistakes. But in fact, nothing could be further from the truth. Calculations of property tax assessments are fraught with the possibility of error, and even the most well meaning officials in the world make mistakes all the time.
Then there is the natural pressure that politicians feel when they need to come up with more tax revenues to pay for municipal budgets. In such an atmosphere workers can feel it their duty to assess properties higher than market conditions would dictate, just to keep the money coming in.
But whatever the reason for over assessments, the fact is that millions of properties each year are overassessed, with the result that their owners pay far more than their fair share of tax revenues. These are the victims of unfair taxation, and the ones most in need of finding ways to reduce property taxes.
So with that in mind, here are three ways you can help reduce high property taxes on your property.
1. Compare recent sales of similar properties to your property’s assessed value.
Most municipalities today are required to tax similar classes of properties (i.e. single family homes) using the same methodology. Most typically this means the tax assessor should determine what 100% of market value is for the property in question. With that figure in hand, the tax rate is applied to the property’s value, resulting in the taxable amount due.
By demonstrating that in fact your property is worth less than it is assessed at, you can reduce high property taxes on the property. The trick is to demonstrate this value by pointing out actual sales of other properties that are very similar to yours, making adjustments for major differences between your property and the comparable sales.
2. Show that your property is not in as good a condition as the assessor says it is
Often times a property will be assessed at a certain value, based on the fact that it is in ‘excellent condition‘ or ‘average‘ or ‘typical‘ condition for the neighborhood. But in fact a property may be in poor condition due to any number of factors, and if so, this can form the basis of a property tax reduction.
3. Show that properties very similar to yours are assessed at lower values
Just as recent sales of properties similar to yours can demonstrate the value of your property, assessed values of properties similar to yours can also make a case for a property tax reduction.
For example, suppose five condominiums in your building are assessed at $230,000 but yours is assessed at $280,000. If all the units are essentially the same, and the assessor has no basis for the additional value of your unit, you have a strong case to have your tax assessment reduced, based on your property’s value being assessed too highly.
There are actually dozens of specific ways to reduce property taxes. This is definitely a case where a little bit of knowledge of how the system works can go a long way towards helping you reduce high property taxes.
