Real estate property taxes can definitely affect your buying power as well as your ability to buy a home and sell your home. A quick formula says $50 per month in mortgage payment equals $10,000 purchase price. So, if you pay just $1,200 more each year in property taxes, you could buy a home that costs $20,000 more.
As a seller, that $1,200 more in property taxes each year means that a buyer can afford to pay you less for the home and sometimes less buyers can qualify. This means with higher taxed properties, you will have to give them more features and more space for the same or less money to sell your home.
So, what can be done to reduce property taxes? Last week, we discussed why property taxes are so high. Addressing those same issues is how we can change or reduce our individual property tax burden.
1. EXEMPTIONS: The easiest way to ensure you are not being over taxed is to get the exemptions you are due. Each county has different exemptions – homeowner, senior (aged 65 and over, disabled people, and some veterans and different amounts for those. You can find out what exemptions you are receiving on your tax bill and also on the county assessors website or by calling or visiting your local township assessor’s office. You can find out what exemptions you are entitled to and may qualify for on the county assessor’s website or by calling or visiting your local township assessor’s office. These sources can also tell you what paperwork you need to qualify for those and apply for them.
2. PROTEST ASSESSMENTS: Tax rate made by government leaders is one reason for the high tax burden. The other part of the equation is your assessment. Especially in times when the market value of homes is changing – down in the last few years and now increasing slightly, you want to ensure you are not being over-assessed. Every 3-4 years the assessor’s office – usually a township, but sometimes county assessor, evaluates your property and compares with other area recent property sales. Each year your township will open for tax protests-usually a very small window of time 2-3 weeks. You can find out the time from your county assessor website or by calling or visiting your township assessor. You can do this yourself or you can hire someone to protest the taxes on your behalf to the county board of review. There are attorneys and other companies who take a percentage of what they save you, so it may cost you nothing or very little compared to the savings. There are forms to be completed and you must provide documentation of why you believe you are being incorrectly assessed. The burden is on you to explain and provide documentation of recent comparable sales or if there is something incorrect about how the assessor has evaluated your property. A mistake in the record in bedroom count, building or property square footage, etc. can affect your assessed value. Many people who protest their taxes are successful if they can substantiate their position. You often need to do this each 3-4 year period. You can find out your assessment on your tax bill and also on the county assessors website or by calling or visiting your local township assessor’s office.
3. DOWN WITH HOME RULE: Home Rule was a reason in some municipalities that many areas have a higher than their share tax burden. Home Rule can be overturned by public referendum in towns under 25,000 populations, which would cancel the blank check that the municipal governments receive to tax and set fees at will. All you need is to get enough signatures to have the question put on the referendum and get people out to vote. A grassroots effort with very little expense can do this
4. VOTE THEM OUT: Since property taxes are more local than anything, your elected state, county, municipal, and school board representatives all directly affect the outcome of your tax burden. You can exercise your right to vote and/or tell your leaders how you feel. Going to village, county and school board open monthly meetings required to be held each month and voicing your concerns is one way. You may even get the attention of local media to amplify your point. On the state level, you can email or call your state representative and let them know of your concerns. But the most direct point of objection is at the poles when you can vote people in place that will address concerns about taxes and vote those out who you believe have not represented the people’s wishes on this matter.
Just like the founding fathers did hundreds of years ago, you can overturn unfair taxation. It may take a little effort but the outcome with pay dividends each year and when you go to sell your home or buy a home.