20.3 Minimize Real Estate Taxes
If you own real estate, you owe taxes. These tactics apply in most jurisdictions. Check your local regulations.
□ 20.3.1 Buy Less Property
Don’t buy more house than you need. The less expensive your property, the lower your taxes.
□ 20.3.2 Live Where Taxes Are Low
If you have a choice of jurisdictions in which to live, favor homes in lower tax districts.
□ 20.3.3 Seek Group Discounts
Many localities tax certain property owners at lower rates, including veterans, seniors, long-term residents, and disabled persons. Call your county clerk or assessor’s office.
□ 20.3.4 Deduct Property Taxes
If you itemize, you usually can deduct real estate taxes.
□ 20.3.5 Change Your Property’s Designation
Some states tax agricultural land at lower rates than residential or commercial properties. Cultivate an understanding of your local laws and see whether you can harvest a lower tax bill.
□ 20.3.6 Find Valuation Errors
In most counties, an assessor values your property for tax purposes. The assessor looks at many factors, including acreage, building size, construction quality, and the number of bedrooms. Obtain a copy of the assessor’s written report—it’s usually available from the county clerk—and check its accuracy. If you find mistakes that reduce your tax burden, inform the assessor’s office in writing. If the mistakes go uncorrected, appeal to the appropriate review board.
□ 20.3.7 Challenge Comparables
When valuing a residence, the assessor usually selects several recent and nearby sales that he thinks most closely resemble the property in question. These similar sales are known as “comparables.” Their selection is an art, not a precise science. You can reach a much lower valuation simply by choosing a different set of comparables. Ask a local real estate broker to supply you with the recent sales data from your neighborhood. Beware: if you mount a challenge, pay close attention to any filing deadlines. If you miss a deadline, you lose your right to appeal.
□ 20.3.8 Pay on Time
Most counties impose penalties for late payment of property taxes. Mark deadlines on your calendar.
□ 20.3.9 Pay With Plastic
Check whether you can pay your property taxes by credit card. Beware: many counties charge fees for this privilege that far outstrip the value of any card rewards.