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How To Reduce Real Estate Taxes

Posted By Jim On 12/27/2006 @ 11:05 am In The Home | 5 Comments

Now that everyone has overpaid for their homes, it’s time to learn how to combat the recurring reminder that you’ve overpaid: real estate tax time! They estimated that real estate tax collections are up like 35% the last four years and there’s little chance that those taxes will be rolled back, so the only two weapons left in your arsenal are to:

  • Contest potential errors, and,
  • Argue your case.

Unfortunately, I believe the artificial floor of your valuation is the price you paid for your home so you can never get it lower than that (it can’t possibly be worth less than what you paid for it, since you likely had a home appraiser come and value the home for a mortgage lender).

Contest potential errors

Apparently, according to the American Homeowners Association, 60% of homes are assessed too high, so this is probably your best bet in contesting the valuation of your home. Check that they have all of your information correct such as the number of bedrooms and bathrooms, finished square footage, lot size, etc.

The article also recommends checking how much your house is worth based on recent home sale prices and real property records of your neighbors. Usually homes in the same development are built similarly so if your house is valued much higher than your neighbors, it pays to check and use that to your advantage.

Argue your case
The AHA says that 70% of contesters who find an error do get it fixed and have a lower tax bill. The two ways to contest are “mechanical errors” where the assessor simply made a mistake, giving you more bedrooms than you have; and the those have the highest chances of success since you can bring something concrete to show the error. The second way to contest are on “judgement errors” where the assessor just gives you a valuation based on your neighbors property.

To contest, first go directly to the assessor and show them your evidence. Often, that’s all you’ll need to do and you’ll walk away with a lower bill. If that doesn’t work and you truly believe in your case, ask for a formal hearing.

Source: CNN Money [3]


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