Property Tax ReliefPublished:
Since 2006, the median price of a home in the United States has declined nearly 20%. Because local tax assessors use historic trends (e.g., the ‘sales comparison approach’) to value properties, your home’s Fair Market Value (FMV) and its Taxable Assessed Value (TAV) may lag behind current market trends in your neighborhood. Of course, some areas have been harder hit than others, but overall, the downturn in real property values has been extreme.
Real property is reassessed at intervals, usually every 1 to 4 years. Your home’s TAV is calculated by reducing its FMV by allowable exemptions as well as deductions for depreciation. Due to these factors, it is fair to assume that the TAV of your property may not be realistic in today’s marketplace.
In Brevard County, Florida (home to The Kennedy Space Center), annual home sales have declined 40% since 2005 ? from a peak of nearly 11,000 units sold per year, to only about 6,500 units sold (as of the 1st quarter of 2010). The county’s median home price has decreased about 43% during that timeframe, from a peak of $220,000 (in 2005) to around $125,000 (through the 1st quarter of 2010).
Depending on where you live, perhaps the first thing to consider with regards to lowering property taxes is whether or not the TAV is aligned with current market trends. Your property’s TAV may be inaccurate if there has been a significant downturn in your neighborhood’s real estate market, or any other changes have depressed property values (such as a major plant closing or natural disaster).
The procedure for having your property reassessed is known as an ‘Appeal.’ Make sure to do your homework if you are filing an appeal. Typically, in order to justify a reassessment, your property value must be assessed at least 10% higher than comparable homes in your neighborhood. You should locate the parcel numbers for homes that are ‘comparable’ and research the fair market values at your local property appraiser’s office (either in person or online).
Another way to reduce your property taxes is to review your allowable exemptions. Have you recently become widowed? Have you made improvements or renovations to your home to accommodate a parent who can no longer live on their own? Take a look at any local exemptions and apply for them as they become available to you.
Additionally, some states have ‘hardship exemptions’ for low-income homeowners and senior citizens. There may be certain restrictions on income, including joint income, as well as the value of your property. Check with your local property tax office for more information.