Many individuals interested in becoming homeowners have second doubts about following through with their plans, no thanks to the high property tax. This is such as shame considering that while you cannot escape property taxes, you can reduce it by taking preliminary measures.
Increase in Property Tax Collections in a Down Market
Many aspiring homeowners hope that declining residential property values will provide a double whammy of benefits – more affordable sales prices and lower property taxes. After all, the property taxes on a piece of property are closely associated with its sale price.
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But this isn’t so in the overall picture. While the nationwide property tax collections may have dips in a quarter-to-quarter basis, the year-to-year trends are actually on the rise. This despite the collapse of the housing prices brought by the economic downturn in recent years!
Let’s just say that it defies logic that the decreased property values can be accompanied by increased property tax collection. But there it is and the local and state governments can take the blame for it.
Keep in mind that taxes are the lifeblood of the government at all levels. Without taxes collected from the citizens, both individual and business entities, the government will likely cease to exist as we know it now.
But here’s the thing. Local governments can raise property taxes in order to address their funding needs, especially when the state legislatures have been trimming their budgets. The state legislature can decide to cut back the budget for aid to the local governments as part of its cost-cutting measures. In turn, the local governments will raise taxes in their jurisdictions to address the issue.
The result: A high property tax encountered by a homeowner on his asset, even when his property’s assessed value has remained the same or even has been reduced via an appeal.
Decrease Property Taxes on Your Next Home Purchase
But this shouldn’t be a reason for backing out from becoming a homeowner or a real estate investor with multiple property under your name. You can take the following steps to decrease property taxes on real estate assets you want to invest in.
- Talk to the present property owner.
You can get information about the property taxes paidover the years he has been its owner. You should also ask about recent assessment appeals and their outcomes. If there have been no appeals, then you may have the opportunity to file an appeal after taking possession. If there have been appeals, you may have to wait until you can file your own appeal.
- Study the property card.
You can actually ask for the property card of the home you’re planning to buy since it is public record; you may have to pay to obtain a copy, nonetheless. You should check whether the data on the property card is accurate, such as the lot size, the home’s square footage, the number of bathrooms and bedrooms, and any known upgrades, as stated by the present homeowner during your discussions.
Conclusion
Don’t let the possibility of high property tax keep you from owning a new home! You just have to find ways to sidestep them, preferably with the expert guidance of a reliable tax consultant.
