Another problem with escrows is by mixing it in with your mortgage payment, it can obscure what you’re paying towards property taxes and homeowner’s insurance premiums. Do you know how much you paid in property taxes this year versus the last? Or how much of each month’s mortgage payment goes towards taxes and insurance? I probably only knew within about $500 the annual total.
Property taxes are usually based on an quick assessment of how much your home is worth. However, local governments rely on these taxes to fund much of their services, so they have an incentive to keep this value as high as possible. With housing prices dropping, the number of property assessment appeals last year doubled in many states.
Should you appeal as well? Here are some quick tips on getting your property tax bill lowered:
- You can find out how often your state does reassessments at this Tax Foundation page. It ranges from annually to 10+ years. For details on how your municipality calculated your assessment, contact your local tax assessor’s office.
- Check your assessment and county records to make sure your land size, house square footage, and other information are accurate. By correcting these measurements, your assessment may automatically be lowered (or raised!) .
- Collect documents that show your home’s value should be lower, such as recent sales of at least three comparable homes nearby. Try using real estate websites such as Zillow or Trulia. You can also see all your neighbors’ property taxes at PropertyShark.com.
- Submit any reports by inspectors or contractors, or at the minimum photos, to prove that your home needs major repairs and is thus worth less. Also document any material changes such as easements, re-zoning, heavy traffic, nearby railroad tracks, or freeways.
- If the amount is significant, you may decide to hire a lawyer or real estate appraiser to help you through the process. Many online sites have popped up that offer to do the legwork for a fixed fee of $100-$300. I have not used any of these sites, and don’t think they are necessary if you are willing to spend a few hours of your own time. If you decide to try one of them, please do your due diligence, and then let me know how it goes! Examples: EasyTaxFix.com, ValueAppeal.com, ReduceHomeTaxes.com.
Have you appealed already? Share your story in the comments below. I hope it’s a success story, but all experiences can be helpful to others.