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Tips On Paying Property Taxes

Tips On Paying Property Taxes

Paying property tax is an inevitable part of owning property but with some helpful tips it is possible to minimize the tax you pay. Evaluating a property to determine its tax rate is a subjective process and has some room for a possible lowering if done properly. There also payment options available which if used correctly can help prevent sudden property tax spikes making it difficult for the property owner to stay current.

A residence is evaluated for property tax purposes by a county tax assessor visiting the property and make a value judgment as to the current value of the home. This assessment takes into account many different factors which may or may not be accurate based on current macroeconomic conditions as well as pricing relative to the neighborhood. It is important to speak with the tax assessor's office and find out what specific criteria was used to determine the property tax. Were property taxes raised a certain percentage across-the-board? Was your house specifically reassessed due to recent improvements? Has the surrounding area seen commercial economic development which has made it more valuable? These and many other questions lend themselves to subjective interpretation and a property tax assessment could become too high as a result.

Regardless of the criteria used to assess the property you always have the option to challenge the assessment and hopefully receive a lower property tax rate. To determine whether or not should make a challenge it is important to do some research first. Speak with your neighbors and ask if they received similar property tax increases and for how much. You can also find additional information by going to the tax assessor's office to research publicly available information. Property records are public information and therefore subject to inspection by individuals. There may be a small fee involved so keep that in mind as it could get expensive if you request to many documents. A rule of thumb though is don't challenge a property tax assessment unless you're virtually guaranteed it will decrease. It would be a disappointing result if you challenge your assessment and then have it increase.

Most homeowners pay a mortgage and as result a certain amount of the monthly payment is allocated towards escrow. Escrow is used to pay for not only homeowners insurance and private mortgage insurance or PMI but also property taxes. Depending on your municipality some property taxes can receive a discount if paid in full once a year. Even if this option is not available it is still possible to have a little more paid into escrow to absorb any property tax increases that should result from a reassessment. Whether or not either of these situations are possible must be determined by speaking with your county tax assessor's office and the financial institution which manages your mortgage.

A final option would be to see if your residence qualifies for a Homestead exemption by the government. Homestead exemptions work by reducing the value of your home or by specifying an amount lower than the appraised value that is taxable. A few of the caveats related to a homestead exemption are that only a primary residence qualifies and it must be applied for annually. Residences which qualify for a Homestead exemption must follow specific rules and restrictions or risk losing the benefit. Much like challenging your property tax assessment, this information is provided by asking your county tax assessor office.

Receiving the tax bill from your assessor office isn't the end of the story and there are many different options for paying or saving money on property taxes. Whether challenging the current assessment in the attempt to get a lower property tax rate or seeing if your residence qualifies for a Homestead exemption, there are steps that can be taken which can help on property taxes. Being proactive in asking questions will make the difference when paying property taxes and hopefully result in saving money.

Image by: Photo Dean