Tips on paying property taxes

Tips and advice on ways for homeowners to cut their tax bills when it comes to paying property taxes.

Property tax is something that every homeowner has to deal with. There are many ways to cut your tax bill as well as benefit from paying your taxes early. With the right payment options and some careful research, you'll soon be on your way to lower property taxes.

One thing that many do not realize is that property tax is subjective. It takes just one person to over assess the value of your home. Assessments are available to the public at your local taxing authority's assessment office. The first thing you should find out is how your tax was assessed. Was it an annual percentage increase? Did they recently reassess your home? If your home is new, the tax amount could be based on the cost of the home. If you've had your home for a while then it could be based on the value of other similar homes in your area or on how much it would cost to build home. The problem with that is that looks can be deceiving. Your home may look great when you look at it from the street, but it may be a different story once on the inside. Most homes are over assessed because the assessment is done from how the home looks from the outside and not the inside.

A couple of ways to find whether your home was over accessed is to talk with your neighbors to compare notes. How much was their taxes? How much was the assessment of their home? You can also get this information from the tax assessment office. Though the information is available to the public, it may cost you a fee to access the information. Some homeowners may rush out to hire someone to do a full assessment of the home to compare with the taxing authority. The problem with that is it may not be admissible in an appeal due to a possible conflict of interest. It's always best to check with your taxing authority to find out what is admissible in an appeal. If you do find that your home has been over assessed then file for an appeal.

There are a few payment options for paying your property taxes that may benefit you. If your home is financed, you could have the taxes escrowed. With an escrow account you can gradually save the money to pay the taxes. Most mortgage companies will even make sure the taxes get paid on time. Normally, the taxing authority gives you the option of paying your taxes in one payment or in two payments. Some even offer a reduction if you pay the taxes in full in one payment. Please see your taxing authority for more information.

It is possible that you may qualify for homestead exemption. Homestead exemption will reduce the value or amount or your home that is taxable. It is not something that you get automatically. You will have to apply for it each year. Only your primary residence can be homestead exempt. There are certain rules and restricts for homestead exemption. Your taxing authority will have more information regarding your specific location as well as the application to apply.

The biggest benefit to paying your taxes early is that it gives you more itemized deductions when you file your federal income taxes. For this to work you must pay your taxes before December 31st of the previous year. If your taxes are escrow you should be able to contact your mortgage company to find out if you have enough in escrow to do this. If there are enough funds in your escrow account to do so, then go ahead. You can then send the receipt to your mortgage company and they will be able to send you the funds from escrow. Be sure to check with your mortgage company on any possible restrictions regarding this.

So whether you escrow and pay yourself, there are always ways to save on your property taxes. You can gather your research and file an appeal against the assessment or apply for homestead exemption. Get a reduction by paying in full with one payment or get more back on your federal income taxes by paying a year early. Whatever the case may be, you're sure to come out ahead of the game.

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