Appealing Property Taxes for Homeowners: A Guide to Paying Less
Being a homeowner definitely has its advantages, but no one enjoys the burden of rising property taxes. If you feel like your property taxes are too high, you don't have to just accept it. You have the option to appeal your property taxes, potentially reducing the amount you have to pay while still enjoying the perks of homeownership in your area.
Understanding How Property Taxes are Calculated
Property taxes are determined based on the value of your property. Commonly known as ad valorem tax, which translates to "according to value" in Latin. According to Tom Parrish, retail lending director at BMO Bank, property taxes are calculated by applying a tax rate set by the taxing district to the assessed property value. These values are usually based on recent sales transactions within the jurisdiction.
The rates for property taxes vary significantly by state and county. While some regions have low tax rates, others have much higher rates. For example, property taxes are highest in New Jersey at 2.2% and lowest in Hawaii at 0.37%. The national average tax rate for American homeowners is 1.1%.
Before You Appeal: Checking Your Assessment
Each year, your city or town assesses your property and sends you a notice detailing the value for tax purposes. Make sure to review this assessment carefully. If you believe it's incorrect, gather evidence to support your claim. Look for recent appraisals, sales of similar properties in your neighborhood, and comparable property tax values to build your case.
Filing an Appeal: Steps to Paying Less
If you find errors or discrepancies in your assessment, you can file an appeal with your county assessor's office. Provide all relevant documentation to support your case, such as appraisals and photos of your property. Be sure to file within the designated timeframe, as missing the deadline could delay your appeal until the following year.
If you're not satisfied with the outcome of your appeal, you have the option to escalate it by hiring a property tax attorney or refining your arguments based on legal standards. Remember, there are no guarantees that your property tax bill will decrease, but taking action to appeal can potentially save you money in the long run.
