If you own a home, theres one expense that you cannot escape paying and thats property taxes. While no one likes to pay taxes, property taxes are necessary for keeping local city, state and town municipalities functioning. Many communities pay for essential services like fire fighting, road repairs and schools with the help of home property taxes. As a homeowner, most likely you pay these taxes through your mortgage company, who keeps track of the amount due and adds them into your monthly mortgage payments.

The recent economic downturn has hit many local communities hard, and as a result, a lot of homes have decreased in value. In fact, in many instances, whole neighborhoods have seen reductions in home valuation over the past few years. As a result of this news, many homeowners assume that just because their home isnt worth what it once was, this means that they will automatically be paying less in property taxes.

Unfortunately, this is not what is happening. In most cases, property taxes are actually going up. How could this happen you wonder?

Well, it all has to do with the town budget. Its a well-known fact that a lot of local communities have had their state and federal funding cut. This is money that cities and towns rely on to pay for essential services to keep the community running smoothly. Without adequate money to fund these services, the community must make some tough choices like laying off firefighters, police and city workers. Schools are also at a greater risk of closing down due to lack of funds. Therefore, the only resource many towns have left is local property taxes.

Each area sets a specific rate of tax on homes. For instance, your local property tax rate may be 7%. If your home is valued at, lets say, $125,000, your property tax payment would be $8,750.

So, the taxes that you pay on your home are equal to the area tax rate and the current value of your home. However, your town government has the authority to raise this tax rate if they choose. This is why you may now be expected to pay more tax, even though your home may have dropped in value. The town is cash strapped and looking to make up the shortfall by getting more money out of each homeowner.

If you are stuck with a higher property tax bill, does this mean you absolutely have to pay it?

Well, yes, you do have to pay your property taxes, no matter what. But, you can do something about the amount of taxes the city wants you to pay. You can contact your local tax board or state property tax appeal board and inform them that you intend to appeal. You have the right to do this appeal and usually have to file your appeal paperwork by a certain date.

When you file an appeal, you are challenging the assessment of your home value with the intention of getting this value lowered in order to pay less in taxes. Theres nothing you can do about a higher tax rate, but you do have some say about what your home is actually worth. Youll need to have your homes value reassessed by a professional. Check in your local community for a qualified home appraisal consultant. You also have the option of doing the legwork yourself, but this means going through the time and trouble of researching your neighbors home value (finding out what the going price is on average for homes in your neighborhood), and doing other research.

Simply filing an appeal doesnt mean youll automatically be granted a lower property tax rate, but if you should win, it will pay off big time. Your taxes for many years to come can be lowered, which saves you a lot of money. In some cases, it can mean the difference between staying in the home you love or being forced into foreclosure.

Because each state and local city/town government is different, youll need to do some research into what to do locally to file a property tax appeal and get a reassessment.

Similar Posts:

Share