Real Estate Tax Too High?
Property taxes can be a large expense of homeownership. On the positive side, property taxes support good schools and community services. Conversely, they come directly out of a homeowner’s pocket and can even prevent future homeowners from qualifying for a mortgage. Most importantly, if they are not paid on time the city has the right to repossess your home. Many homeowners have no idea how their property taxes are calculated or even where the money goes. Understanding property taxes can save you time and money.
Property tax calculation methods varies from city to city. Smaller cities have appraiser go house by house on a yearly (sometimes every five years) basis to appraise every home in their jurisdiction. This value is then applied to whatever tax rate the city has established to cover their expenses. In larger cities they use an automated valuation method (similar to Zillow’s estimates). Again, this value is applied to the local tax rate.
After the city completes their estimate, a homeowner typically has a small time period to appeal the valuation. Many homeowners assume the city always gets it right and don’t take advantage of this opportunity. This is a mistake. At the very least a homeowner should thoroughly go through the appraisal. This will provide the homeowner a good idea of what the value of their home is currently.
More importantly, catching a mistake in this process could literally save you thousands of dollars a year. This is especially true in larger cities because of their use of an automated valuation method.
If the valuation of your property seems way too low, do a small dance and keep quiet. However, if the valuation seems too high you will need to follow up with the city. If you have had an appraisal recently this will be as simple as sending a letter contesting the city appraisal. Attaching your most recent appraisal and some recent sales should help your case. Typically the city will reappraise your property, hopefully getting closer to the right value.
It is very important that you do research and state your case with numbers. This can be accomplished by working with a real estate agent, who can provide you comparable properties and recent sales. If you feel like the value is way off, it may be worth it to hire your own appraisal firm. The appraisal will cost about $500, but it could save you several thousand dollars per year for the next five years.
Please call us today at (347) 878-8686 to speak to one of our experienced, licensed appraisers. We will gladly answer all of your questions and help you schedule an appointment time that is convenient for you.