If you own a home, chances are you pay property taxes on a regular basis—either through an escrow account set up by your mortgage lender or directly to your local government.
These taxes help fund public services, but they can seriously drive up a monthly mortgage payment. Depending on your home’s value and how your local government calculates the tax rate, real estate taxes range from a few hundred dollars a year to thousands. But there are two main ways to potentially lower your property tax bill. Here’s how.
Appeal the assessed value
As a homeowner, you should receive a quarterly statement that includes your home’s assessed value, the tax rate and how much you owe in real estate taxes. You won’t be able to appeal the tax rate, which is usually set at the county level, but you can appeal the assessed value of your home if you feel it’s incorrect. Here’s a general rundown on how to appeal:
Contact your local tax office. Ask how you can appeal your tax bill and request a copy of your property’s current assessment. You’ll usually submit a form, but every city or county has a different system for filing an appeal.
Go over your home’s assessment. Read through the document and “look for areas in which you think mistakes were made,” said Tendayi Kapfidze, LendingTree’s former chief economist. “For example, if you’re told your lot size is 10,000 square feet, and you can prove it’s only 8,000, you might be able to get the assessed value of your home lowered.”
Order an appraisal. Tax assessors may rely on historical data to come up with your assessed value, Kapfidze said, but a private appraiser can provide a much more detailed examination of your home. “Depending on what the appraiser says about the value of your home, you can use their findings to appeal how much money the government says you owe," he noted.
Present your appeal. With the information you’ve gathered, fill out your tax appeal and provide documentation that proves your home value is too high. “You can include pictures that show damage to your house or receipts showing that any improvements that you have made have been minor,” Kapfidze said.
Apply for property tax relief
Another way to potentially lower your property tax bill is by applying for tax relief programs. These vary in every state and county, but they generally release eligible homeowners from paying all or part of their property taxes.
“For example, if you’re a senior citizen or disabled, then you might be able to have a portion of your home’s value exempted from the tax you owe,” Kapfidze said.
Guidelines vary, but you might be able to apply by mail, phone, online, or at your local tax office. Here’s an example of how the application process might work:
Do your research. Head to your local tax office website and search for terms like “property tax relief,” “homestead exemption,” or “property tax exemptions.”
Check instructions and requirements. Local governments often provide the application and instructions on their websites. Read the eligibility requirements to see if you qualify and what you’ll need to do to apply.
Complete the application. You may need to gather documentation to show you qualify for property tax relief, such as a pay stub or a document that shows your birth date.
Submit the application. Apply by the deadline and ask when you may receive a response. Keep in mind that you may have to submit a new application each year.
The process may be tedious, but “if you’re having trouble paying, or you think that the government has grossly overvalued your home, then it would probably behoove you to look for exemptions or to appeal your tax bill,” Kapfidze said.
If you still haven’t been able to lower your property tax bill, you might consider other ways to save money. For instance, you may be able to write off property taxes by itemizing your tax return rather than claiming the standard deduction. Taxpayers can deduct up to $10,000 in combined property taxes and either state and local income taxes or sales taxes each year. Another option is refinancing your mortgage to lower your overall monthly payment—as long as refinancing makes sense for your financial situation.
Kim Porter is a freelance writer and editor.
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