Saturday, May 2, 2009

Slashing your real estate property taxes

Clearly, housing is still in a down market. During the second quarter of 2008, home prices dropped 15.4% over the same period in 2007, according to the S&P.
It’s not pretty. But it’s adding injury to insult to pay property taxes based on a home value assessed during the housing bubble.
Not all towns adjust their assessments every year to reflect the current market. Most are not raising taxes but keeping them the same until the housing market changes. While somemunicipilatites do revalue properties annually, others do so every five years. So if your home was last assessed during the market peak, it makes sense to consider challenging the assessment.
When to seek a reassessment isn’t an exact science. It depends on how much your home’s value has declined, and on what sort of dollar gain you’ll likely get in your tax bill. If your paying $1,000 in property taxes and getting your home reassessed will drop that by 10%, you’re pocketing $100…Probably not enough to justify the effort of an appeal. But if you can save say, $500 or more, it is probably worth it.
1. Know you towns methodology- Visit your auditors website or visit the office and find out when the assessments are done, what period they cover, and how and when homeowners can appeal those decisions.
2. Need help? - Once you have filed a reassessment you may get mailers from Realtors or Attorneys offering to help you lower your property taxes.
3. Check for mistakes - Mistakes on property assessment records often mean homeowners are taxed at higher rates than they should be. The inaccuracy rate on home assessments is between 30% and 50%, depending on the region. For example, if your county gives homeowner roll over credits to be an owner occupant make sure you are getting this credit. This is a very common mistake. Also check the acreage, size, and number of bedrooms to make sure they are all correct.
4. Check out similar sales - If your town’s assessment method is based on the market value, homeowners should ask themselves: Could I sell my house for this much? If the answer is no, look at what comparable homes in your town have been selling for. Comparable means: same school district, number of bedrooms and same lot size. Use sites such as Zillow.com, cyberhomes.com to search sales date of individual homes. Keep on this information to submit with your reassessment paperwork.
5. Make your claim - Most appeals are submitted in written form to county boards with a statement explaining why you think the valuation is inaccurate, how much you think your house is worth and evidence to support the claim.