Homeownership is usually seen as an important part of financial independence and creating generational wealth. However, there are costs to owning a home which you should be aware of. One of these expenses is property taxes. The following are several ways which may help minimizing your property tax liability as a homeowner.
Verify your property tax profile
Go to your appropriate local government agency and request your property card which will display your property profile for purposes of property taxes. Make sure the information listed, such as lot size, is accurate for your property. Often an inaccurate property card profile may result in you paying more taxes.
Consider holding off on making structural changes
Be aware that making structural changes to your property could result in a larger property tax bill. You might want to consider holding off on moving forward on any of these types of projects if having a lower tax bill is important to you. Making changes to your personal property is your personal choice.
Think twice about cosmetic improvements
Although it may seem natural to make sure your home is looking great, you might want to think twice about making too many cosmetic improvements before the property assessor inspects your property. Since a significant part of the assessment process is quite subjective, making your home look too good could result in a higher value assessment which will mean a larger property tax bill. However, this is totally a personal decision, if you want to make your home look good, by all means do so.
Research your neighbors
Not only are you able to access the local records for your own home through the relevant local governmental agency, but you also have access to records of your neighbors. You should take a look at comparable homes within your neighborhood to see if there are any discrepancies in valuations. If a similar home seems to be valued much lower or higher than yours without any perceivable reason, the assessment on your home may have been a mistake and you may be able to have it reassessed for lower property tax liabilities.
Guide the assessor
When the property tax assessor arrives at your home, you may want to walk the property along with him or her. In this way, you can point out various deficiencies he or she may not easily notice. Some assessors, if left on their own, may only take note of aspects which make your home more impressive and valuable, but may tend to ignore the deficiencies. It is your job to make sure the assessor’s biases do not result in you paying more property taxes unnecessarily.
Possibly allow assessor access
You are usually not legally required to allow the tax assessor into your home, but it could be a good idea to provide access to your home’s interior. If the assessor is not able to enter the home, he or she may assume significant improvements had been made. This could result in a higher valuation for the property which may mean a larger property tax bill for you.
Comprehensive tax planning
Of course, property taxes are only one of several types of taxes you may have to deal with throughout your lifetime. It is a good idea to have a comprehensive plan for dealing with all your various tax liabilities. This should be a part of an overall financial plan which is specifically tailored to your own circumstances and personal financial goals.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.