The ownership of a home sometimes comes with strings attached that are troublesome to property owners. Things like upgrades, repairs and unforeseen weather damage can make the most jovial person not want to get out of bed sometimes. Few people like the idea of paying property taxes and it is one of the requirements of owning a home. The neighborhood where you own an investment property could be facing declining home values. The procedures for tax assessments are different for every state and it helps to know how your taxes are calculated when they are assessed on a rental property. There are ways of lowering your property tax bill if you put some time and effort into learning the process that have worked for many property owners.
Property Tax Reduction Strategies
Since real estate transactions are public data, you can find out how much properties sell for in any neighborhood in the U.S. It makes no difference if a property is new or old. The process of completing a sale is the same for every property. You can access this data in the county where you live and evaluate the selling price of several homes near your property. If any fluctuations are found, you can examine the changes further. Your property value is based on many different activities that affect the local economy. The appreciation of your property is only one factor. Discrepancies between your assessed property value and others you have researched can be brought forth to your local taxation office.
Upgrades and remodeling are one way that you can improve the value of your property. The problem with this during tax assessment season is that the increase in value could be night and day between what you think and what the local tax authorities think. As an example, if you purchased a property for $100,000 in 2010 and the market value was $105,000, it is necessary that this be reflected on your tax assessments. Incorrect assessments can be made when the improvements do not match the appreciation increase or decrease in a property. This can be contested to help lower your tax bill.
Getting Overpayment Money Back
People are human. Errors are made when taxes are assessed although many people never contest the process. If you have current or previous year's tax bills, you can research the increase or decrease in your property tax. It is important to study the bills for any misinterpretations of upgrades, repairs or other improvements that should be adjusted in your tax rate. If you found that you have overpaid, contacting your local taxing authority and making a formal request in writing can help you get a refund. A review period can last up to 6 months while tax assessors review your written claim.
Many real estate investors face problems with taxation at some point when owning a property. Learning the ways of lowering your property tax bill can be a big help and let you keep more of your rental income that is earned each year.