How To Lower Your Real Estate Taxes

We all pay taxes, we all pay too much. Unlike most taxes you may be able to lower your real estate taxes.
The property tax is a total of the various taxing entities that assess taxes on your property. These include counties, cities, school districts, and special districts. In many areas these taxes are collected by the local county and disbursed to other taxing entities.

Each taxing entity sets its own tax rates. You can attend the annual public hearing to voice your opinion on the tax rates, but this is not the best way. The taxing entity will set the rate based on how much money they think they need. Your protest is usually a waste of time.

Challenge Market Value to Lower Property Tax

Challenging the market value of your property, as determined by the county, is the way to lower your property tax. Each property is appraised and the tax rates applied to that appraised value.

By having the property value lowered, the taxes will be lowered. The county or city sets the property value which all the taxing entities use. They are supposed to use the actual value of the property but for a variety of reasons the value can be incorrect.

One Warning. If the county assessed value is less than the value of your property, count your blessings, and do nothing. On the other hand, if the assessed value is higher than the actual value you can do something about it, but do it the right way.

I have seen people approach a county and ask for their property taxes to be lowered. Their reason may be “I think they are too high” or “You raised them by 20%”, this won’t work. You need proof to force the county to lower the taxes. You need to prove the county assessed value is wrong.

Recent Closing Documents

If you purchased the property recently, use your closing documents. The documents show the purchase price, proving the county value is too high.

Property Appraisal to Prove Value

If you’ve owned it longer you need a property appraisal to prove the assessed value is high. The county doesn’t like to lower values as it lowers their tax revenue. Be firm and have your proof when presenting your complaint.

With the recent banking crisis and collapse of real estate prices it is likely your real estate taxes are too high. The county is required to assess property at actual market value. If you prove the assessed value is high the county is required to lower it, lowering your taxes. Use your recent closing documents or an appraisal to prove the county assessed value is high.