The joys of commercial or residential property ownership cannot be overstated. From a financial standpoint, property is a unanimously celebrated asset. But owning property also has an unfortunate side effect—costly and frustrating property taxes. Contrary to popular opinion, your property tax isn’t immovable (or movable only in an upward direction). Though predicated on the overall value of your property, there are methods, tips, and tricks for lowering or limiting your property tax burden.
Depending on the type of property you own and its current usage, some options for limiting or lowering your property tax may be more or less applicable than others. Even so, there are dozens of good tips out there, several of which can be found below. If your property tax burden is too high, consider one of these helpful tips or tricks.
REVIEW YOUR PROPERTY TAX ASSESSMENT
Generally, property taxes are a matter of public record and your tax assessment can be found by accessing your local tax authority’s website. Using the parcel identification number, the owner’s name, or the property’s address, you can review valuable information about your property’s tax assessment, including the current assessed value of the land and improvements, as well as any exemptions currently being allowed (see below).
CHECK FOR LOCAL EXEMPTIONS
State and local governments make property tax exemptions for certain entities, owners, and property uses. Exemptions may not lower your property tax to zero, but they could help to limit some of the cost.
Common local property tax exemptions include those for senior citizens, veterans, the differently abled, and what’s called the “homestead” exemption. The homestead exemption can be especially helpful as it applies (in most circumstances) to those who own a family home and who use that family home solely as a residential property.
In Alabama, qualifying property owners may claim a homestead exemption. Additionally, taxpayers 66 years old and over and those who are permanently and totally disabled or blind may qualify for additional exemptions. Any one of these exemptions could remove significant cost from your property tax burden each year. And chances are good that these exemptions exist in your area.
LIMIT PROPERTY IMPROVEMENTS
Your annual property tax hinges directly on the value of your property. Every change, renovation, or expansion project will inevitably add value to your home and dollar signs to your property tax burden. Though it may seem counterintuitive, by refraining from improving your property, you keep your property tax at or around the current rate.
If you have to make renovations to your residential or commercial property, you may want a rough estimate of added value before construction starts. This should also give you a round idea of how your improvements will be reflected at tax time. Talk to local building and tax departments before you build for a general idea of the increase to your property tax.
ACCOMPANY YOUR ASSESSOR
When your job is to calculate the highest value of a property for taxation purposes, you tend to look on the bright side. Property assessors may see your property through rose colored glasses, missing the small and large imperfections in favor of spotting new improvements and other higher quality features.
When your assessor arrives at your property, you may want to accompany them so that you can point out imperfections. While we wouldn’t normally walk a guest through our property and point out everything wrong with it, in this case, your input may help balance out the ultimate value of your property which could save you big down the line.
SEEK A SECOND OPINION
If you feel that your property has been improperly valued, you might consider hiring an appraiser of your own. You’re not completely stuck with the appraisal provided by the tax authroity’s assessor. For a fee, you can secure a second opinion which could end up paying dividends through the years.
An independent assessor may see your property through a different lens or catch minor, but cost saving, imperfections that the first assessor missed. The fee associated with an independent appraisal might be more than worth it if it saves you thousands of dollars over the next few years.
LOWER OR LIMIT YOUR PROPERTY TAXES
Thankfully, there are an abundance of tips and tricks out there to help you lower your property tax burden. From local exemptions to a guided (and more realistic) assessment of your property’s value, you’re a great deal more than powerless when it comes to reducing your property tax.
Owning residential or commercial property represents a sound investment, but even the best investments can quickly spoil when the cost to maintain them is overly burdensome. However you feel about your present property tax, there’s bound to be something that you as the owner can do about it. For more tips and tricks, contact your local tax authority or your trusted advisors today.