Slash your property tax bill in 5 easy steps

We all know that housing is still stuck in doldrums. Home prices have descended by tremendous percentage over the last year. But what’s hitting the homeowners is the property tax which was assessed before the housing bubble burst. As of now plenty of houses are worth below their peak value, so you can challenge the assessment of your property taxes and shed off the overly paying property taxes.

Property taxes are calculated on an assessment based on your property’s value. According to the National Taxpayers Union, a nonprofit advocacy group, up to 60% of the property in US could be overtaxed. Many townships may adjust their assessments every year to reflect the current market and some may do so every 5 years. If your house was assessed during the housing bubble you can challenge for reassessment. No wonder approximately one in three challenges to residential assessments results in reduction of the tax bill.

It’s always better to calculate the amount you’ll be saving after reassessment before making a challenge. As effort putting a challenge could be more than what you would be saving.

Here’s how to save hundreds or even thousands of dollars in the process:

1. Stop by your local assessor:

The address of your local assessor can be found on your tax bill. You must explore in advance that which forms you need to file out and deadline for filing. (Usually deadline is 60 days or less from the time you received the mail to file an appeal). Gather the detailed information on how and when to appeal the decisions. You can also collect a copy of your property card that assessor used to determine the property value which has the details about your residence such as square footage, no of bedrooms & bathrooms.

2. Start on your own:

There are many attorneys or real estate agents who would offer to help you with this process. They may charge some percentage of your first years’ tax reduction which could be 50% that you obviously won’t prefer to pay. Rather you can buy property reduction kits from AHA (American homeowners association) or homeowners’ property reduction kit for as low as $29.95 or get a free 30day trial AHA membership.

3. Analyze property card for mistakes:

Sometimes the mistakes on your property card lead you to pay 30% more taxes than desired. There could be these errors:

Math errors: Since property taxes are calculated by percentage of a property’s value multiplied by local tax rate set by government, so you should keep a check on math errors.

Clerical Errors: There could be an error in classification of your property such as commercial instead of residential. Or sometimes your home is evaluated more than its actual worth.

If you’re able to catch these mistakes, you can apply for reassessment.

4. Check out neighborhood sales:

Compare price of your home with similar ones in your area. This information would be available at your local community or you can visit www.zillow.com, www.valueappeal.com to make comparison. All you need to do is to find a home in same school district, same sq feet area and same number of bedrooms with lower price than yours. If your home is evaluated 5% higher than houses comparable to yours then you can challenge for reassessment.

5. File an appeal:

You can submit your appeal in written form to county board explaining the inaccuracy in evaluation. You need to provide the hard evidences such as other similar houses evaluations, photos, your property card along to prove yourself. The rules aof appeal may vary with state. At some places you can place your case in a hearing and the results are notified within a week of decision.