One of the most frustrating aspects of home ownership may be property taxes. They are levied annually and can amount to thousands of dollars, depending on where you live. While they can be a significant burden, they don’t have to be. Learn what you can do when you need help paying your property taxes.
When Can Property Taxes Be Burdensome?
Property taxes are a part of life, but they don’t always have to be a problem. Many homeowners choose to have an escrow account for their mortgage where they pay their property taxes and homeowners insurance in monthly installments. This means they never face a large tax bill all at once.
However, your property taxes can regularly rise, especially when your property is reassessed – even if your income isn’t moving in the same direction. If the county decides that the value of your home has increased, your taxes will rise accordingly.
For example, let’s say you just bought your first home. Online records show that the property was assessed and taxed at $150,000 in the past. However, the real estate market is competitive, and homes in your area are selling for high prices, so you paid $250,000 for the home. The county may use your high sale price as part of its assessment the next time you pay your property taxes.
This tax increase can be particularly confusing if you choose to pay it in one large sum instead of through your mortgage account.
Challenging Your Tax Assessment
You don’t have to accept your county’s assessment of your home. The National Taxpayers Union Foundation estimates that between 30% and 60% of taxable properties in the United States are over-assessed.
If you believe your home’s recent assessment value is too high, you can file an appeal challenging your tax assessment.
The process for appealing your property tax assessment will vary depending on where you live, but a good checklist can help. However, some counties may charge fees to file an appeal. While the process – which will likely include preparing “comparables” of similar properties with lower prices, photos of your property, or other evidence to support your case – may take time, the majority of people who file an appeal win at least a partial victory, making it a good option to consider.
Finding Property Tax Assistance Programs
If your appeal isn’t successful or isn’t an option, there are still some different ways to get help when your property taxes are due.
Deductions
Property tax deductions can significantly reduce or even eliminate taxes on your home. They vary by location, but some programs help those who are facing hardships or poverty. Others aim to incentivize the purchase or renovation of properties in specific areas. For example, California offers the Mills Act program, which provides tax reductions for those making renovations on historic homes.
Deferring Payments
Some states and regions have programs that allow you to defer your tax payments. Eligibility for these programs varies, but it may be based on age, income, health, and other factors.
Depending on the program, you may owe deferred taxes with accumulated interest when the property is no longer your primary residence.
Plans
Payment
If you cannot pay your taxes in one lump sum, you may qualify for a payment plan that allows you to pay in installments. Depending on where you live, these programs may allow you to complete payments without incurring fees or interest.
Exemptions
Tax exemptions relieve the tax burden on homeowners for various reasons. Check with your local government for details, but good examples include homestead exemptions for primary residences, agricultural property tax exemptions, and disabled veterans exemptions.
Some veterans may qualify for a complete exemption from property taxes, depending on their classification by the Department of Veterans Affairs (VA). This can provide them with thousands of dollars annually.
Other Ways to Deal with High Property Taxes
If reducing your property taxes is not an option, you’ll need to consider other ways to help manage those taxes. You might try cutting back on your spending or redirecting your life to lower your cost of living. If you really need a cash influx, you might try finding a second job to help cover those expenses. Selling your home may be another option, allowing you to move to a location with lower property taxes or find a home that offers discounts.
What Happens If You Don’t Pay Property Taxes?
Property taxes must be paid. There are significant consequences for non-payment. In the short term, you may face fines and penalties for non-payment. Depending on how long you go without paying your taxes, your property may be sold by the local tax authority to cover the costs of overdue taxes, fines, and interest.
Frequently Asked Questions (FAQs)
When are property taxes due?
Property tax due dates vary; you will need to check with your individual county to find out when your taxes are due.
How are property taxes calculated?
Property taxes are considered “ad valorem”, which means they are calculated based on the value of your property. Once that is assessed, the value is multiplied by the local effective tax rate.
How can I find out how much I’ve paid in property taxes?
There are easy ways to find out how much you’ve paid in property taxes:
- Check your 1098 form from your mortgage company. Box 10 will contain detailed information about the amount you’ve paid.
- Search for property records on your local county tax assessor’s website.
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Sources:
National Taxpayers Union Foundation. “Are You Paying Too Much in Taxes?”
California State Controller. “Property Tax Postponement Program.”
Veterans United Home Loans. “All Veteran Property Tax Exemptions by State.”
Napa (CA) County Tax Collector. “Delinquent Property Taxes.”
Intuit Turbotax. “Where Can I Find Out How Much Property (Real Estate) Tax I Paid?”
Source: https://www.thebalancemoney.com/how-to-get-help-paying-property-taxes-5193071
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