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6 Ways To Reduce Your Property Taxes

You may be able to get breaks for being a veteran or a senior

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).

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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.

3. Look for other exemptions

“That’s always a good idea,” Ostrowski says. “Research those and take advantage of as many of those as you can.” Many states give veterans an exemption, particularly those with disabilities. Resident veterans in Florida with at least a 10 percent disability rating are entitled to a $5,000 deduction on the assessment of their home for tax purposes. Resident veterans with a 100 percent disability rating may receive a full property tax exemption. Many states also offer a property tax exemption for those with disabilities.

4. Get help

It never hurts to ask for assistance. The AARP Foundation’s Property Tax-Aide program provides information on eligibility and how to apply for property tax relief.

Since its inception in 2019, Property Tax-Aide has served over 40,000 people with an estimated benefit of $10 million in property tax relief.

See more Health & Wellness offers >

5. Move

If you think taxes are too high in your area, consider moving to someplace with lower taxes. (Bear in mind that each county or city in a different state may have their own level of property taxes.) In New Jersey, the property tax on the average home is $9,527. In neighboring Pennsylvania, the tax on the average home is $3,983. Don’t forget, you may get fewer services in areas with lower overall taxes.

6. Be wary of property tax scams

Scary — and fake — letters demanding overdue property taxes are a fixture of most four-star scam shops. A variant of that scam is the fake property tax assessor. You’ll get a letter suggesting that you’re paying too much in property taxes because home values have fallen. The scammer will try to get you to pay thousands of dollars in fees to get the home reassessed, thereby reducing the property taxes. Be sure to check with the Better Business Bureau or with your state tax office about any company that promises big breaks on your property tax returns.

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