Are You Paying Too Much in Property Taxes?

If you have a mortgage it is highly likely that your payment includes your property taxes.  The majority of mortgage loans have an escrow account where your payment includes not only the principal (the money you pay to pay back the money you borrowed) and interest (the money you are paying for the privilege of borrowing money), but also money to pay your taxes, insurance, and mortgage insurance. Your total payment is also referred to as your PITI payment (short for principal, interest, taxes, and insurance).

The old saying, out of sight out of mind pops up for me here. Since you pay your real estate property taxes each month you might just throw away your tax bill or not give it a second thought once you have mailed it to your mortgage company to pay.  This could be a costly mistake.

wallet clamp money

If your assessed value (the value the government says your house is worth) increases then your monthly mortgage payments will increase ~ even if you have a fixed rate mortgage. So what can you do?

The first step to reducing your property taxes is taking a good look at your tax bill. Click To Tweet

I just got my tax bill in the mail.  Imagine my surprise when they said my house went up over $150,000 since the last tax assessment.  If I just let this go, then this new value would become the value and my taxes would spike up along with my mortgage payment.

If this happens to you, or you think the value is too high to begin with, you need to file a dispute with your taxing authority.  I had 45 days from the date the notice date (this date was printed on the notice itself and is NOT the date I received it….so I really had just over 30 days).  I could file my dispute online or by mail.

You can’t dispute your property taxes just because you don’t like the bill, but you can dispute… Click To Tweet

When disputing your tax bill, you need to be prepared. Here is where accuracy matters. You can dispute your bill without any information, but I would not suggest it.  I could obtain the data used by the tax assessor’s office from them.  Your assessor may offer this same information.  I chose not to wait. I looked up trending sales data and recent sales of similar houses in my neighborhood (see Additional Resources below for more information).  This data led me to the conclusion that the tax assessor had overvalued my home.  So I decided to file a dispute.

home mansion property taxes

I chose the online option.  I could choose between a hearing by the board of equalization, an arbitration, or a court hearing. After reviewing the options, I chose a hearing by the board of equalization.  This may or may not be the right option for you.  Be sure to see what your taxing authority offers as choices and read through them to pick the right option for your situation.  (I’m not an appraiser, but I am happy to send you a blank copy of my spreadsheet.  Just email me at ChristyS@StarkeyMtg.com with the subject line “Property Taxes”. If you have a little extra money and less time and expertise, you can seek out a professional appraiser to do the property research and analysis for you.  Expect to pay between $300-$500 for this service.)

If your tax value is accurate, can you still lower your property taxes? Click To Tweet

Regardless of the value, you may have other options to lower your property tax bill.  You need to look over your tax assessment and see if you making use of all available exemptions.  Many municipalities give homestead exemptions (If you are active duty military note that this could change your home of record to the state where this property is located.  This could have more drastic impacts on your income tax situation.  Please reach out to a professional to get expert tax advice.), military and Veteran exemptions, first responder exemptions, age based exemptions if you are over 65, and exemptions for those with disabilities.  Some municipalities even offer 100% tax exemptions for disabled Veterans and un-remarried surviving spouses of disabled veterans and service members, firefighters and peace officers killed in action.

Be sure to check to make sure you are utilizing all of the exemptions available to you.

Taxes are a part of life, but you can take steps to avoid paying too much. Click To Tweet

stacks of pennies

 

Additional Resources:

 

Search sold homes on iPhone or Android (use VIP code pearlyspad for a free account)

File an online property tax dispute in Chatham County, GA

State of Florida Property Tax Exemptions

Chatham County Georgia Property Tax Exemptions

Lower your property taxes with advice from ABC News

Make sure you deduct your property taxes on your income taxes! Thanks Mark Brian!

Alabama appraisal information and disputing Alabama taxes via Tom Horn

Reducing your property taxes in Texas

Texas appraisal information via Zachary Trostel

Ways to pay fewer property taxes as an investor

 

 

 

This blog is for informational purposes and does not contain or convey legal advice.  The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.

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