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Property taxes are generally used by local governments to pay for education and other local services, so they certainly serve an important purpose. Nonetheless, you may feel as though your home is not being valued and taxed fairly. When you learn how to save on property taxes, you can take steps to lower your tax bill now and in the years to come.
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You Can Lower Your Property Taxes If…
Here are a few tips and tricks I discovered while reviewing my own property taxes. You can actually save some money if you try and do some of the following.
1. Review Your Property Tax Bill
An important first step to take if you are serious about fighting your tax bill is to review it carefully. Focus on the tax rate assessed to your home as well as the property value. You may qualify for a senior citizen exemption or another type of exemption available in your area. However, this exemption may not have been assessed.
Perhaps your bill is too high because your home is overvalued. These are two of the most common reasons why homeowners fight their tax bills. Keep in mind that you must have a valid and legitimate reason for disputing your tax bill. Also, you must have supporting documentation available to provide to your property tax authority.
2. Learn Property Values in Your Area
You also need to review property values in your local area if you want to know how to save on property taxes. Use a real estate agent to obtain sales comparable data in your neighborhood. Choose data for homes that have the same number of stories and bedrooms as your home. Focus on finding homes that have similar square footage.
This will help you to determine more realistically the value of the home. Keep in mind that you must use sold comps rather than for sale comps when making this analysis. This supporting documentation should be provided to you at the time you officially dispute your tax bill with the property tax authority.
3. Fight Your Taxes on Your Own
Take time to review the property tax repeal process in your local area. In addition, use Facebook or other methods to gather information from friends, co-workers, and neighbors who have fought their tax bill in the past. This will help you to be prepared for your appeal. Some appeals are able to be made via mail with a written letter and supporting documents. Others must be made in person by scheduling a formal meeting with a representative for your tax authority’s office.
4. Hire a Legal Professional to Represent You
After you learn how to save on property taxes, you may be overwhelmed or intimidated by the process. Many people are confused about relevant terminology. Also, they do not feel that they can argue their case fully on their own, for example. A wise idea is to hire a legal professional to assist with your appeal.
He or she can represent you throughout the process and can present your case during the appeal process. Because he or she is aware of the law and the appeals process, you may enjoy better results as well as a less stressful process. However, there is a fee associated with using legal services.
5. Use a Tax Service to Assist You
If you want to know how to save on property taxes, you can also consider using a tax service for assistance. In some areas, professional services are available to help homeowners like you fight their tax bills. You can reach out to one of these service providers. Explain the reasons why you think your tax bill is too high. If they choose to represent you, you can generally enjoy a stress-free process. However, it may still take several weeks or longer to receive an answer from the tax assessor regarding your request to lower your tax bill.
6. Move to a Home With More Affordable Taxes
Some people who want to know how to save on taxes realize via research that their home is valued fairly and that their rate is in line with what others pay. They also realize that all applicable exemptions have been applied to the tax bill. They simply have no reason to fight their property taxes.
If this is the case, the unfortunate reality is that you owe the full amount of taxes that have been charged to you as the homeowner. If you are tired of paying a high tax bill or if the tax bill has become unmanageable for you because of value appreciation, you can consider moving to a new area. Each community may have a different property tax rate. Moving to a new county or school district can also help you save money on property taxes.
If you want to know how to save on property taxes by relocating, ask a real estate agent for more information on property taxes in locations near you. This can help you begin the relocation process.
7. Relocate to a Different State
Some states have substantially higher property taxes than others. Each state has its own income generation methods. For example, Texas obtains a substantial amount of money for education and public services from its property taxes. However, it does not have a state income tax at all. Because there is no state income tax, property owners can expect to pay between approximately three and four percent in property taxes in this state.
All states have property taxes, but some have a lower property tax rate. For example, Hawaii’s average property tax rate is .28 percent, and Alabama’s property tax rate is only .43 percent. There are more than ten states that have a property tax rate of less than one percent. You can consider moving to a state that has a lower property tax rate. However, keep in mind that these states may have a state income tax or another method to generate revenue from you.
You understandably want to know how to save on property taxes. As you can see, your primary options are to fight your tax bill if you have a reason to do so. You can also accept your bill and move on with your life or move to a different area. Carefully review your financial situation and your tax bill to determine the best course of action to take when dealing with this very high expense in your budget.