4 tips to lower your property tax bill!
As a homeowner, one expense you cannot avoid is your property tax. Luckily, there are ways you may be able to lower your tax!
Tip #1: Select the location of your property carefully
Your local county / city uses property tax revenue to fund public services such as the fire departments, police departments, schools, and other infrastructures of your locality. Different localities apply different rates. For example, New Jersey has one of the highest property tax rate and Louisiana has one of the lowest. By taking time to select your area before investing in a home, you can minimize your property tax bill.
To read more on each state’s property tax rate: Property Tax Calendar & Rates - by states
Tip #2: Limit your home improvements
Property tax is calculated on the value of your property (ad valorem tax). Your locality assigns a value to your property (assessed value). The assessed value includes the value of your home but it also includes the value of structural improvements such as adding a pool, building a deck or adding a large shed on your land. By keeping these home improvements to a minimum, you will limit the increase of your property tax bill.
Tip #3: Apply for tax exemptions
Many states offer tax exemptions which lower your property tax bill. These includes: discount for a main residence (homestead exemption), for veterans, for senior citizens, for people with disabilities, for agricultural purpose and even for paying your tax early! As a reminder, property tax is also deductible on your income tax return fully when you rent your property.
To read more on property tax deductions in Florida: http://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx
Tip #4: Review your bill for discrepancies
Your property tax is calculated on the characteristics of your property such as the square footage and any extra features. To ensure your property tax is correctly calculated, you will want to review your bill to make sure your home characteristics are accurately reflected. In addition, you may also want to check your bill against comparable homes in your neighborhood to make sure you are not overpaying. To do so, log on to your local property appraiser’s website and review your property listing for mistakes.
To read more about other real estate tax deductions: https://www.kbfinancials.biz/revenus-fonciers--les-charges-deductibles.html
As always, the views contained in this article are not tax or legal advice and are not a substitute for consulting with a tax professional. Karine Bauer, EA is an IRS Enrolled Agent licensed by the US Treasury Department with unlimited rights to represent taxpayers before the Internal Revenue Service. Karine is also a Quickbooks Pro-Advisor and a member of the Association of Chartered and Certified Accountants (ACCA). She is an experienced tax professional with more than 20 years of international experience.
Bear in mind the date of this article as tax law evolves over time.
Updated May 17th, 2022