Tax Reduction Methods for Homeowners

Most homeowners would agree that they pay too much in property taxes. Real estate taxes are levied by local governments and collected by homeowners. They’re called ad valorem, which means they’re calculated according to the value of your home.

If your municipality has its act together, it will appraise your home’s value every few years and send you a tax bill based on that amount. But because appraisals can be flawed, and because the market value of your home may have changed since the last one was done, you might end up paying more taxes than you should.

If you think your property taxes are too high, you have a few options for appealing the assessment and reducing the amount you owe.

One option is to file an informal appeal with your municipality’s assessor. You can usually do this by phone or in person. You’ll need to explain why you think your home is worth less than the assessed value and provide some evidence to support your claim.

If you’re not satisfied with the assessor’s response, or if you don’t want to deal with the hassle of an informal appeal, you can file a formal appeal, also known as a petition. This is a more involved process, and you’ll need to follow the specific instructions for your municipality.

You’ll probably have to appear before a board or panel to present your case, so it’s a good idea to prepare well in advance. You’ll need to provide evidence that your home is worth less than the assessed value and convince the board that you have a valid case.

If you’re still not happy with the result of your formal appeal, you can take your case to court. This is a complicated and expensive process, so you should make sure you have a strong case before pursuing it.

You might also be able to reduce your property taxes by taking advantage of tax exemptions or abatements. These are usually available for homeowners who are over a certain age, have low incomes, or have disabilities.

You’ll need to check with your municipality to see what exemptions or abatements are available and how to apply for them.

Reducing your property taxes can be a long and complicated process, but it’s worth it if you end up paying less. With a little research and effort, you can save yourself a lot of money.

Request Your Property Tax Receipt

Every municipality is different, but most will allow you to request a copy of your property tax receipt. This document will list the assessed value of your home as well as the amount of taxes you paid.

It’s a good idea to request a copy of your tax receipt if you’re thinking about appealing your assessment. It will give you a starting point for determining whether you’re actually paying too much in taxes.

You can usually request a copy of your tax receipt from your municipality’s website or by contacting the assessor’s office.

Check Your Municipality’s Appraisal Schedule

Your municipality should appraise your home every few years to make sure the assessed value is accurate. If it’s been a while since your home was last appraised, there’s a good chance the value has changed.

You can check your municipality’s appraisal schedule to find out when your home is due for another appraisal. If it’s been more than a few years, you might want to consider requesting one.

You can usually find your municipality’s appraisal schedule on its website or by contacting the assessor’s office.

Get an Independent Appraisal

If you’re thinking about appealing your assessment, it’s a good idea to get an independent appraisal of your home. This will give you an accurate estimate of its value, which you can use to support your claim.

You can usually find a qualified appraiser by searching online or asking for recommendations from friends or family. Once you’ve found someone, you’ll need to provide them with some information about your home, such as its square footage and the number of bedrooms and bathrooms.

The appraiser will visit your home to take measurements and take photos. They may also look at comparable homes in your neighbourhood to get an idea of your home’s value.

Once the appraiser has all the information they need, they’ll prepare a report that includes an estimate of your home’s value. This report will be very helpful when you’re making your case to the assessor.

Research Your Municipality’s Assessment Process

Every municipality has its own assessment process, so it’s important to do some research and find out how yours works. This will help you understand the steps you need to take to appeal your assessment.

You can usually find information about your municipality’s assessment process on its website or by contacting the assessor’s office.

Prepare Your Case

Once you’ve gathered all the information you need, it’s time to start preparing your case. You’ll need to convince the assessor that your home is worth less than they think it is.

To do this, you’ll need to present evidence that supports your claim. This might include recent sale prices of comparable homes in your neighbourhood, photos of your home, and a copy of the independent appraisal you had done.

You’ll also need to be prepared to answer any questions the assessor might have. It’s important to be polite and respectful when you’re dealing with them, even if you don’t agree with their decision.

Make Your Case to the Assessor

Once you’ve prepared your case, you’ll need to make an appointment with the assessor to discuss your appeal. This is usually done in person, but some municipalities allow you to do it over the phone or online.

When you’re meeting with the assessor, be sure to bring all the evidence you’ve gathered to support your case. Present your evidence calmly and logically, and be prepared to answer any questions they might have.

If the assessor agrees with you, they’ll lower your assessment and you’ll start paying less in taxes. If they don’t agree, you can file an appeal with the Board of Revision.

File an Appeal With the Board of Revision

If you don’t agree with the assessor’s decision, you can file an appeal with the Board of Revision. This is a panel of experts who will review your case and decide whether or not to lower your assessment.

To file an appeal, you’ll need to fill out a form and submit it to the Board of Revision. You’ll also need to pay a fee, which is usually around $50.

Once your appeal is filed, the Board of Revision will review your case and make a decision. If they decide in your favour, your assessment will be lowered and you’ll start paying less in taxes.

If you don’t agree with the Board of Revision’s decision, you can appeal to the court. However, this is a very complex process and you’ll need to hire a lawyer.

Appealing your assessment can be a lengthy and complicated process. But if you do your research and prepare your case carefully, you have a good chance of success. Lowering your assessment will reduce your property taxes, so it’s worth the effort.

Recap

1. The first way to reduce your taxes as a homeowner is to take advantage of the mortgage interest deduction. This deduction allows you to deduct the interest you pay on your mortgage from your taxable income.

2. Another way to reduce your taxes as a homeowner is to take advantage of the home office deduction. This deduction allows you to deduct the expenses you incur in running your home office from your taxable income.

3. Finally, you can also reduce your taxes by taking advantage of the capital gains exclusion for homeowners. This exclusion allows you to exclude up to $250,000 of the gain you realize on the sale of your home from your taxable income.

By taking advantage of these tax reduction methods, you can significantly reduce your taxes as a homeowner.