When you pay your property taxes, it is a major source of income for state county and local governments. Different types of land are taxed differently but generally, your property tax is a percentage of the assessed value of your property.
What causes property taxes to increase?
If your property taxes increase the most likely cause is because your property value has gone up. The assessed value includes both the land and the buildings on it. Tax assessors will value your property every one to five years and then tax you at the appropriate rate. One of the main causes of higher assessed value is improvements to the property. Another common cause is improvements to your neighborhood such as new construction or even improvements to some of the neighbor’s homes. Anything that makes your home or the area that its located in more desireable can raise the assessed value of your home and as a result raises your property tax.
Local governments also have the authority to raise the rate at which your property is taxed. Since property tax is one of the main income sources for local government when a county or city that imposes property tax has a spread between the budget and current funds they can choose to raise property taxes. However, some states impose a cap on the property tax rate.
Schools also receive large portions of funds from property taxes. So if there becomes a need for additional funds, school districts can choose to request additional funds from the local government who then increase the property tax rates to compensate for the spread.
What can I do about it?
In most cases, if the tax bill is not too outrageous people will go ahead and pay it. However, if you feel that you are being overtaxed there are somethings that you can do about it.
- Get a copy of your property tax card from your local tax assessors office. This card will have all the basic info about your tax rate, assessed value, etc. review this info and look for mistakes and request correction or reevaluation. Mistakes are very common so you might be overpaying.
- Limit the improvements and curb appeal of your home before your home is assessed. Your home is essentially compared to other homes in your neighborhood and surrounding area so before you do any improvements call the building and tax departments and get a ballpark range of the increase in tax value.
- Do research on your neighbors home and tax value. You can generally find this information online. Compare your home to others that are about the same size with the same amenities. See if your home is fairly valued. If not talk to your tax office and see what you can do to dispute your tax value.
- If you feel you are being overtaxed you can also hire a professional appraiser to inspect your home and give a more accurate value for your home. It will cost you some money but will hopefully save you money down the road.
- You are not obligated to let a tax assessor into your home but it may be in your best interest to do so if you feel you are being overtaxed. By granting an assessor access you give them an opportunity to make a more accurate assessment.
If these tips and tricks don’t give the result you were hoping for you can always hire an attorney to help you dispute these increases in your property taxes. An attorney can also help you find different tax exemptions that apply to your situation.