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Are There Legitimate Ways to Reduce Your Property Tax Bill?

  • By: Jerome Quinn
  • Published: January 3, 2018

With the ever-increasing cost of living and all-round rise in the prices of everyday goods and services, it is no wonder that property owners are also not left out of the drive to cut costs.

When it comes to property or home-ownership, the one cost that cannot be avoided is the property tax bill. However, while it cannot be wholly avoided, given the right conditions and circumstances it can often be reduced to a certain degree.

Perhaps the best place to start this discussion is to describe what exactly a property tax bill is and why people have to pay it in the first place.

A property tax is a tax that is directly levied by a local government in a specific state on all real estate property that is found within its jurisdiction. This figure, which will usually be calculated by a government official or assessor, is arrived at by multiplying the value of your property with the current local tax rate, often called a mill rate.

The main function of, and reason for this tax is to provide a source of revenue for the government to provide basic but essential services to the residents of the locality. Just like other forms of taxation, a property tax is mandatory, backed by law and is often a criminal offense to evade it. Something which is punishable by the imposition of fines or even imprisonment.

Having said that, while you are legally required to pay the tax that has been levied on your property, there is nothing in the law that says you can’t find legal ways to reduce it. And the good thing is that there indeed are several legitimate ways to do so.

The key to achieving this is by doing proper and thorough research and taking full advantage of any and all tax reduction strategies that are available to you.

How to Reduce Your Property Tax Bill

Challenge your tax assessment

Part of saving on your property tax bill means not having to pay more than you should. According to the National Taxpayers Union Foundation, between 30 and 60 percent of taxable property in the United States is over-assessed. Shocking as the percentages might be, very few real estate owners have gone as far as to question their assessment letters, let alone challenge it.

A thorough look through your property tax assessment notice will help you determine if your local government is billing you correctly or fairly. Your property tax bill should reflect the correct information regarding the value of your property and that the municipal tax rate being used is accurate and is on par with similar properties near you.

In the event that you note any discrepancies, it is more than likely that you are paying more than you should. To resolve this, the logical thing to do would be to follow the necessary steps prescribed by your local government on challenging tax assessments. With a bit of luck and a strong case, you might be well on your way to getting your tax bill significantly reduced.

Check if you qualify for property tax exemptions

Although local governments are heavily reliant on property taxes to meet their financial needs, there is usually an established tax exemption system to help alleviate the burden that such a tax can often place on some people.

In the State of New York, for instance, the Department of Taxation and Finance website states that most property tax exemptions are for veterans, seniors, people with disabilities and agricultural properties. Each state will likely have specific categories or situations when you can qualify for an exemption and it will always be up to you to find out if you qualify. In situations where you do not directly fall into any of these categories, then you might need to enroll in a property tax relief program.

What this program does is to allow low-income households to pay lower taxes, making settling their tax bills less burdensome. To be eligible for the property tax relief program, you will need to prove that your household earns a low income and possibly meet other requirements. When in doubt, a good place to start is by seeking the guidance of a professional well-versed in matters of real estate such as a New York real estate lawyer or agent.

Keep renovations to a minimum

As a property owner, you will likely get plenty of home improvement ideas you would like to execute. It might be a simple project like painting the exterior of your home or going all out and renovating the basement. While such projects often add to the value of your house, they also have the corresponding effect of adding to your property tax liability.

If you absolutely must make such renovations, try and time it to coincide with after an assessment has been on your property. That way your tax assessment will be calculated against the old property value and not one just after a renovation.

Cite special circumstances relating to your property

Another way to potentially slash your property taxes is to make the tax assessor aware of any issues your property may have had. You might have had to repair your roof due to excessive rain or a tree fell and damaged your home. Repairs for property damage are often expensive and together with high property tax can be overwhelming. The fact that these incidents were beyond your control is something you can bring to the attention of your tax assessor. By making the tax assessor aware of these issues, you may possibly be able to qualify for a reduced tax bill.

In Conclusion

If asked, practically every property owner will likely say that they would be interested in finding ways to reduce their property tax bill. If that is the case, it behooves such property owners to investigate what options are available to them to do so that are in line with the provisions afforded to them by their relevant local governments.

The tips mentioned in this write-up and several others that have not been touched on, but which can be gotten with proper research or by speaking to knowledgeable professionals will no doubt go a long way in helping you achieve this objective.

Jerome Quinn

About the Author Jerome Quinn, Jr. began learning the law as a teenager working in his father’s
law office. After law school he started his legal career representing families, individuals
and small businesses that had been taken advantage of by financial
institutions and fiduciaries. Read More