At Real Property Management Optimum, we recommend all of our landlords to take the time to do this because you could find out that your assessment is excessive, which once re-evaluated can lead to lower property taxes. There are various ways to determine whether your current property assessment is right.
How a Property Should be Assessed
Properties are normally assessed yearly by a town or city’s assessor. In most cases, the assessor reviews the current status of your property and any improvements performed and the current market conditions for similar homes in your area, and then they multiply that by the area’s level of assessment as established by the municipality. If you own a multi-family building, the assessor will factor in the valuation the income realized from the property over the past year minus maintenance costs. The cost of replacing the home is also a consideration in deciding the assessment.
If you look at your annual property tax bill and nearly collapse from shock at the figures, take some deep breaths and then carefully examine the options you must have to reduce the tax bill. One thing to consider, however, is that you’ll have a deadline to dispute the assessment. Most municipalities will offer you 30 to 60 days after you receive the assessment to challenge it.
How to Understand an Assessment
Look at what the assessment states about your property. You might discover that you’ve suddenly become the owner of Alexandria property that is nothing like the one you have. For example, the assessment may mistakenly give your house four bedrooms when it only has three or place your address in an upscale neighborhood adjacent to your real location. In one case, a homeowner’s one-story home with vaulted ceilings was erroneously listed as a two-story house and charged twice the actual square footage because the assessor viewed it from outside rather than doing a more thorough inspection.
The value of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you might be able to learn from their assessment. Otherwise, it’s a good idea to compare your property with four or five in your general area that have the same amount of square footage and the same property size.
Look into Exemptions
While taking the time to make sure the valuation of the property is right, also investigate whether you’re receiving any exemptions to which you’re qualified. Some states and many municipalities offer breaks to homes located in certain areas, owners who are senior citizens or veterans, and many other exemptions. Your local tax assessor can help you find any tax breaks to which you’re entitled.
If the first tax bill after purchasing your property shows that its tax assessment value increased by almost 50 percent in one year, as what happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Many tax assessors are willing to informally explain your assessment. If you’re not satisfied with the informal explanation, you can make a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments substantially.
When you work with Real Property Management Optimum, we help you get the most out of your property and lead it to success. To learn more about the services we offer, contact us online or call us at 612-730-8293 today.