How to Lower Property Tax

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When you buy a home, depending on where it is, your state may require you to pay property tax on it. Each state charges a certain percentage based on the value of the land and improvements made on the property. The real estate property tax can average from 1 to 2 percent of the total value of a home. Property owners pay these taxes for as long as they own their homes unless there is a change in the state law.

  • Have your property reassessed based on current market sales. It is possible that the home values in your area, including yours, have dropped. In a market that is in a downturn, chances are you may find that your home's value is lower than the previous reassessment. You have 60 days after receiving your property tax bill to complete your requirements or else you will still pay higher tax on the current roll if you are unable to make the change prior to the first due date of your tax. Normally the bill comes in between spring and late summer.

  • Hire a realtor to get the comparable sales prices of homes that are similar to yours in your neighborhood. The realtor would look into similar square footage and property size. Ask him to run at least two reports and see if there are houses sold within the past few months that are similar to yours but that sold for a lower price than what you paid or at a price lower than your latest assessment.

  • Ensure that the comparables show recent sales only, usually within the past three to six months. The sales should be as close to each other as possible to show trends and not just a sale from someone possibly selling over to a family member for a lower price or someone doing a rush sale due to divorce or other legal matters. The report should show trend data of multiple homes, at least three houses in the vicinity of your home.

  • Ask your realtor to provide two originals of the comparable sales. One original may work, and you can make several copies on your own, but if you request two originals, you do not need to run back to the realtor in case you need to make an appeal in the future.

  • Send your request letter to your county assessor's office. The letter should include your name, date you are writing the letter, property address and the parcel number of your property. Explain in the letter that you are requesting that the county to re-asses your property and that you have included recent data proving that your property value is lower than what it used to be. Attach the copy of the comparables that your realtor provided for you.

  • Complete the forms that the tax assessor's office may require you to submit. Some states or counties may have a different system for reassessing properties and they may have forms for you to complete. Submit them along with your letter.

  • Mail your letter registered or with receipt acknowledgment so that you can track your mail.

  • Prepare for an appeal if they decline your request. Usually they will not if you have done your homework, completed the request legibly and proved to them that the assessed value of your home is higher than the real market value. However, if they do, then you can appeal your case.

Tips & Warnings

  • To prevent your property tax from going much higher, try to avoid refinancing or renovating that could increase the value of your home.
  • Do not falsify documents; you may face some legal consequences if caught.
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