Tim Wood, CFF

Safe Money Retirement

Tim Wood, CFF picture

"One thing that you can always count on, death and taxes."

When you own a home, you are liable for the property taxes assessed on your property. The taxes collected on your property pay your share of the cost of local schools, government, and several other local and other programs. The biggest mistake many homeowners make is overpaying these taxes. You have rights and have the opportunity only to pay your fair share of the taxes assessed. You have options available to you to make sure the assessment on your home is fair. However, you do not have to overpay to be honoring your civic duty by paying taxes. Several things can be done to lower your taxes and help keep the cost of owning a home down.

Fair Assessment:

The most important thing is a fair and accurate assessment of the value of your home. Each year (or every three years), the county tax assessor will evaluate the value of your home and any new improvements made to it. The tax assessor will also consider the "fair market value" of any homes sold (also known as comparables) in your area and the replacement cost of your home. The liability can be established once the tax assessor determines your property value. Schools, municipal areas, county, and special tax districts determine your actual taxes. The assessments from the taxing districts cannot be contested. The tax assessor has leeway and discretion in evaluating each piece of property. The evaluation should be fair, and you have the right to complain and argue with this valuation. Your tax liability will be lower if you can successfully claim a lower valuation.

Most tax assessors will allow you to discuss the evaluation of your home and generally will negotiate these values when a solid argument is made. The easiest way to lower the assessment is to discuss with the person who determines your home value. Information you can provide regarding similar home valuations in your area will all help you make your point of the argument.

Tax Exemptions:

Many states allow for the filing of a Homestead Exemption Act to lower the value of your home. This filing protects the allowable state limit of the Homestead Act and will reduce the value of your home by that amount. The reduction in the value of your home will lower the tax overall tax liability of your property taxes.

Many counties in this country allow for a senior citizens tax exemption. This exemption is based on the overall income of the occupant of the home. Each state or county will have its own rules and exemptions, so you should contact your local county tax assessor.

Mortgage Insurance:

Many FHA-guaranteed loans require an insurance payment based on the age of the loan and the value of the loan. This insurance is no longer needed and can be removed. Often the amount charged is too high and can be reduced at specific periods. Contact your local mortgage service company for specific details.

The most important thing to remember is that you have rights, and you can argue for those rights. Most homeowners who ask for a re-assessment of their home value will receive a benefit adjustment.

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