Termites are probably the only thing homeowners dislike more than property taxes. The average home price has soared an average 11.8 percent a year over the past three years, according to the Standard & Poor’s CoreLogic Case-Shiller U.S. National Home Price NSA Index. Although that’s wonderful, your property taxes have probably risen alongside your home’s price.
Property taxes help the state pay for everything from education to sewage treatment, and in some states, property taxes are the state’s chief source of income. Texas, for example, has no income tax, but its cities and towns do: They average 1.25 percent. (New Jersey has a 1.79 percent property tax rate, the highest in the country, as well as a maximum 10.75 percent state income tax rate).
Many counties and cities have additional property taxes on top of the statewide rate. How much you pay in property taxes depends on the value of your home, your state’s property tax rates and any exemptions you may have. You can lower your property taxes, however, in six ways.
1. Appeal the appraisal
Your bill is based on an appraisal, which is typically done by a state or local appraiser. Call the appraiser — politely — to discuss what went into the appraisal. You can appeal it if you feel that it doesn’t reflect the true value of your home. To do so, you’ll have to provide more evidence than the fact that you think the increase in the home’s value — and therefore your taxes — is too high.
You may need to look up the value of comparable homes in your area. And if you have problems with the house that might lower its value, now is the time to let the assessor know.
Be aware that simply appealing the appraisal may not bring relief, especially if you’re in a suburban housing development. “In my experience, the local property appraisers are using automated valuation models that are pretty accurate,” says Bankrate analyst Jeff Ostrowski. “It’s kind of unlikely that your value is going to be significantly different from your neighbors’.”
2. Look for senior exemptions
Many states offer a break on property taxes for people 65 and older. The break comes from applying the tax rate to only a percentage of your assessment. For example, New York state applies its property tax to as little as 50 percent of the appraised value of your home. You must be at least 65. The state allows each county, city, town, village or school district to set the maximum income limit at any figure between $3,000 and $50,000.