Your municipality will assess your property. You will then receive a figure explaining the property's current worth, and how much you will need to pay in property taxes. Do not automatically assume that figure is a correct one.
Understand How the Assessment Works
Assessments can work slightly differently, depending on the municipality. In general, the assessment of your property considers the following factors.
- Current fair market value (appraisal)
- The difference between the fair market value and the local total market value (rate or ratio)
- Assessed value (appraisal multiplied by rate)
- The current tax rate (as determined by a mill levy)
Your personal property tax rate is the assessed value multiplied by the tax rate. However, it's possible for mistakes and discrepancies to occur with both the appraisal value and the overall assessment. It's important to go over it point by point so you fully understand what's going on.
How the Assessment Can Make Mistakes
Check if the fair market value listed actually matches the current market value. Also, check various homes in your neighborhood to see if they have similar market values as yours.
It's not unheard of for a municipality to base an appraisal on old information. You might find the current market value varies a bit from what the city came up with.
Remember that your property value has a lot to do with its size, layout, and features. Your assessment may contain more, or less, items on it than what's actually on the property. You might find all types of discrepancies.
- The square footage of the property
- The number of rooms
- Features are no longer there, or were never there
Looking at comparable properties in the area can also help with this. You might find out your neighbor has the same setup and layout, but is paying far less in property taxes.
How the Assessment Can Lead to Hardships
You can find you've literally given away thousands of dollars over the years due to unfairly high property taxes. Your property taxes may even cause you hardships if they're too high. Remember that late payments come with penalties and interest. A simple miscalculation can have you stuck in a debt-ridden rut.
What You Can Do About it
If you find any mistakes, miscalculations, discrepancies, or anything else that doesn't look right, seek a reassessment and file an appeal. How you do this will vary by municipality. Check your county's government website for information on how to start the process.
You may already have run into delinquency, liens, foreclosure, or legal troubles. If you find yourself in real trouble, you may need a professional to help you deal with the municipality. You will need someone that can help you lower your rate, or work out a property tax settlement for what you owe. Contact a company like Tax Assessment Xperts Inc for more information.