Get help with paying property taxes.
There are a few different options for homeowners when it comes to receiving assistance with their property taxes. Households can challenge their local government, town or city hall on their total property tax bill, and this is done by contesting the assessment. In addition to that, many states and local municipalities provide a form of financial assistance. This can include homestead exemptions or deductions for seniors, disabled, or people facing a hardship.
When it comes to addressing unpaid property taxes, homeowners will have the most success when they are pro-active. This means challenging an assessment, looking into deductions, applying for senior freezes or exemptions, and exploring any local government assistance programs. Do this early, before the arrears on the account becomes too large. Appeals can also be effective, and more details on the process is below.
It is always a good idea to meet with a local town representatives or assessor and see what type of resources they may offer. Also check in with a non-profit HUD counseling agency, as some have referrals to region real estate tax assistance programs. Or inquire with a social service office or charity. The process can take time, so homeowners need to plan well ahead in order to receive relief on time. All of this needs to be done before the family were to miss a payment and before they fall behind on your property taxes.
Programs that assist with real estate taxes
If you currently owe money on the taxes to a local municipality, then the options are more limited. Some towns and counties may work with homeowners that are delinquent, but it is not that common. Options may be payment plans, low interest loans as a form of financial aid, exemptions and more. Find how to get help with delinquent property taxes, including information on installment plans.
Many governments offer financial support for certain scenarios. They are often called exemptions. So if a senior citizen owes money to the municipality for the taxes on their home, they may get relief. Or there may be support for members of the military, veterans, people battling a life threatening condition or disability, and others. Read more on property tax exemptions.
Overview of the property tax appeal process
Historically property tax increases were largely the result of rising home values. However more recently, with the slow but steadily growing housing market in many parts of the country, many real estate tax increases are the result of the increase in rates set by local governments and assessors. This means that the local government is in effect trying to bring in more revenue, and they do this by asking more from homeowners.
While a property owner can’t do much in regards to the rate, one thing they can do at anytime is to try to save money on their real estate taxes. This involves determining if the assessment is fair when compared to other homes. If the value given to the property is out of line to other homes, then homeowners can appeal the amounts involved.
Different formulas are used by local governments to calculate property taxes. The process varies widely by town, state, county, and city. But the bottom line is that the amount a household will need to pay in property taxes depends on a home's assessed value, and in today’s market you may be able to challenge that assessment.
The National Taxpayers Union has estimated that over 50% of properties in the United States are overassessed. This means that almost half of the population may be able to save some money as too many people are paying too much in property taxes. These individuals often do not even know this, so they often need help.
However, despite these growing property tax bills, less than half of homeowners will ever protest their assessments. The reasons for this vary widely. That means most people are needlessly paying more in property taxes than necessary. The bottom line is that the appeal process is not as challenging or difficult to do as many homeowners fear.
If you really do not have the time or do not want to gain the knowledge to challenge any real estate bills, then the homeowner needs to hire an attorney or property tax consultant to do the work. Most of these folks charge on a contingency basis, which means that they work for free, and they will not charge a fee for their work unless they save the homeowner money. In that case they will only charge a percentage of the annual property tax savings if they succeed in lowering your assessment.
Anyone that explores this option should always try to hire on a contingency basis, and not someone who charges a flat fee or bills hourly. If the client were to enter into this type of arrangement then they do not need to worry about paying a consultant’s bills or hourly rates unless they win.
Know the property tax appeal process and deadlines
The highlights of the appeal process is as follows. Or the homeowner can view a more detailed, step by step guide to challenging their property taxes.
1) First, the homeowner needs to establish a timeline. What month do the local assessments go out? When is the cutoff for appealing? Anyone can quickly call a local tax assessor's office for help getting this information.
The appeals process and deadlines vary from locality to locality. So does the amount of time that a resident is permitted to file an appeal. Sometimes a homeowner may have as few as 30 days to file. In other areas, the resident may have up to 120 days.
2) Look for errors. Tax bill mistakes are more common than many people may think. Homeowners are responsible for catching the error and they need to point this out. Never pay for errors on a real estate tax bill. Most assessors do not even visit the property to inspect it. They instead rely on and compare a description of a house with that of similar homes in a specific neighborhood.
Also, appraisers may very well use historical information that is incorrect to calculate property taxes, and if they do, then that person is paying too much. As an example, a houses square footage might have been incorrectly stated or calculated on the original construction documents.
Another common error. An assessor may have a slightly different thought process than the property owner does for their home. For example, the local tax assessor may be counting a screened in porch as a year round living area and the homeowner may only use it in the summer, so they may be paying high property taxes for something that is incorrect on the assessment.
The property owner needs to check the number of bedrooms, bathrooms, and everything else about their home with what the assessor has on file. Never forget any modifications they have made. For example, if they have torn down a garage in order to increase garden space, the home's value likely will have decreased.
3) The assessment may be higher than comparable homes. Another way to contest a tax assessment is to review how the home compares to other, similar houses in the neighborhood. Similar and comparable means homes of the same age, size, and general location.
For example, someone may live in a 550-home subdivision in Texas. But even within that large subdivision, there are absolutely differences that affect value and the property owner will need to help point this out to the assessor. A home near a busy road, or an entrance, in the community should be valued less than those on a creek, so the taxes paid need to be less.
A member of the community can find information on comparable homes and their assessment as well values at the assessor's office. Most municipalities now also have this information online, so google for it. If the homeowner does not want to do this work and needs help, then hire an attorney, property tax consultant, or even a realtor. Get tax data on five to ten comparable homes and see what they are paying for taxes. This is public data and is at the assessors office or online, and by law, they need to help show you how to do the research.
Once the owner has the data, go over the numbers and then they can decide whether they have a case. If the data shows that the assessment is higher than comparable neighbors homes, then that person is paying too much in taxes. The individual will need to contact their assessor's office and they should first try to arrange a one-on-one, informal meeting. They can write, call, or stop by their office. If they decide to write their local assessor, find an example of a letter used to appeal property taxes.
Many times simply communicating with the assessor and pointing out the data and facts can be enough for the assessor to lower an assessment and the resulting real estate tax bill. Read how a record number of homeowners are successfully challenging their home assessment.
Some studies show that over 80% of cases are resolved through informal negotiations. However, just be aware that when the owner informally meets with their assessor, it truly is a negotiation. They may end up with a higher valuation than they would like, but it would still be one that is lower than the assessor's original appraisal,. No matter what a lower assessment will help the homeowner save on their annual property tax bills.
The hearing, if it is needed
If the local tax assessor will not meet with the owner (also note that some areas will not permit informal meetings), or if they do meet but still fail to reach a fair agreement, the next step that the owners need to take is to protest the tax assessment. This is free to do and pays long term “dividends” in the form of a reduction in annual homeowner expenses.
Ask the tax assessor what the procedure is and what the deadlines are to file a protest in a certain town or municipality. The assessor needs to help answer those questions. Be sure to follow the guidelines to the letter of the rules to ensure against an appeal is not dismissed due to a technicality.
Before the hearing, gather all of data, stats, and evidence and put it into order. For example, the owner may want to put the market stats and data into a spreadsheet or format that makes it easy for the officials to see the basis of their argument. In addition the homeowner should strongly consider collecting photos of comparable properties and their real taxes/assessment. The presentation doesn't have to be as polished as a top notch lawyer, but being, and showing that the person is organized, will help put on the strongest possible case. It will increase their chance for success. Find out what percent of property tax challenges are successful.
Another idea is to consider sitting in on somebody else's hearing before the appeals date. The hearings are free to attend and public events. By doing this the owner can see how the local board operates. They can also get a sense of what arguments don’t work, and those that do work.
Even if the board doesn't rule in the owner’s favor despite a compelling presentation, they can always take their case to court. Note that in many cases it will cost more in fees and attorney bills than the amount of tax money the client might save. Many states also have a state appeals board where people can state their case if the local panel rejects their petition. It is important to stay professional and composed throughout the process.