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How To Lower Property Taxes For Homeowners With High Taxes

Gustan Cho Associates
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This BLOG On How To Lower Property Taxes For Homeowners With High Taxes Was PUBLISHED On February 24th, 2019

Many pre-approved home buyers run into a home they absolutely fall in love with.

  • Home price is below their budget
  • Perfect sized lot
  • Excellent neighborhood
  • Close to their place of work and schools
  • Close to expressways and shopping
  • However, the property taxes are higher than they would like
  • What should they do?
  • Do they enter into a real estate purchase contract and try to contest their taxes?
  • Homeowners with higher taxes is a dilemma many homeowners and buyers face

On this blog, we will discuss appealing taxes for homeowners with higher property taxes.

Do I Need To Hire A Lawyer To Appeal Taxes

Homeowners can Lower Property Taxes themselves.

  • Those without time can hire a real estate attorney who specializes in property tax appeals
  • Most attorneys work on a contingency pro-bono basis where they charge a third of the annual property taxes savings
  • Basically, they work on commission
  • If they are successful, homeowners pay a percentage of their first year property tax savings
  • If they are not, homeowners do not pay anything

Those who are hands-on and familiar with real estate basics contest it themselves. 

Homeowners Need To Pay Attention On Their Annual Property Taxes

Most homeowners do not pay attention to what they pay in property taxes.

  • The main reason is most homeowners have their property taxes escrowed
  • When they pay their monthly housing payment to their lender, the property taxes and homeowners insurance is included in the monthly mortgage payments
  • However, if they were to pay attention and see the percentage of the property taxes is part of their monthly mortgage payments, they will think twice about contesting their property taxes
  • Take steps every year to lower your property taxes
  • Many homeowners property taxes may be higher than their actual mortgage payments
  • There are ways on lowering property taxes
  • However, the county assessor will not tell you that you are paying too much in property taxes

The homeowner needs to fight for it to be lowered.

Challenging Home’s Assessed Value

There are two sections on homeowner’s property tax statement.

  • The home’s assessed property value and the tax rates that are applied
  • There is not much anyone can do about the property tax rates
  • Tax Rates are for local services of the township the property is located at such as police and fire department services, schools, and other municipal and/or city services
  • However, homeowners can contest the home’s assessed value
  • The home’s assessed value is not always what the subject property is worth

A home appraised value is the actual value on what the home is worth. 

How Homes Are Assessed

A town’s and/or county assessor will assess a home’s assessed value by looking at similar and like homes are selling in the area.

  • Special emphasis is placed on recent sales near the subject property
  • Assessors determine the assessed value of homes by using comparable recent sales analysis
  • They are not always accurate so it is beneficial for homeowners to look at all the numbers
  • Homeowners can dispute their local assessed value by contacting their local assessor’s office
  • Check to see if the description of the subject property is correct and there are no errors

Check to see if the number of bedrooms and bathrooms is correct. Make sure the assessor does not count a half-bath as a full bath.

Special Credits Given To Homeowners

Some homeowners may qualify for special credits that lower property taxes.

  • If the home buyer purchased a home that was an investment property, the taxes will be higher than comparable homes in the area
  • Make sure to declare a homestead exemption
  • This will greatly reduce your property taxes
  • Some counties and townships may offer special discounts to senior citizen homeowners and veterans

Depending on the percentage of disability, disabled veterans may get a huge reduction or may not need to pay property taxes.

Appealing Home Assessment Due To Errors

Homes near railroad tracks or near busy streets often have lower property values. Homeowners who live next to commercial areas who are getting taxed the same rate as homeowners in sub-divisions, then they have a case. There are countless factors that can affect a home’s value. Negative factors such as owning a home next to power lines will definitely lower the home’s value. This homeowner’s property should be assessed at a much lower value than a comparable home in a sub-division. Homeowners who are appealing their assessed value to lower their property taxes needs to keep in mind they need to compare their home’s value with similar and like homes in their area to win the appeal. Lot size, bedrooms, bathrooms, square footage, amenities, and other unique factors is what determines a successful property tax appeal.

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