Anyone who owns any property, such as a home, knows that part of being a property owner is having to pay a tax on this type of asset. The vast majority of jurisdictions in the United States impose property taxes on land, buildings, and residences to finance local schools and government agencies. Of course, most homeowners want to help support their local communities but would also like to avoid paying excessive taxes. Here are three good ways to keep your property tax liability to a minimum.
The homestead exemption is perhaps the most common way to reduce your property tax bill. The provision exempts a certain portion of your home's value from being taxed. Typically, two types of exemptions exist; one that sets aside a fixed amount of your home's value and one that lowers the taxable amount of your house's worth by a certain percentage.
For example, if your home is worth $100,000 and the homestead exemption is $20,000, then you pay tax on only $80,000. On the other hand, if your exemption is 10 percent, you pay taxes on $90,000 of your $100,000 home.
A key point to remember is that not everyone is necessarily eligible for a homestead exemption. A few states do not allow them and some states restrict them to certain groups such as the elderly or disabled.
Deductions, which can also reduce your overall tax liability, work differently from exemptions. An exemption typically lowers the amount of tax you pay to your local municipality, while a deduction lowers the amount of taxes you pay to the state or federal government. The most prominent property deduction is the state and local tax deduction, commonly known as SALT. This provision allows you to reduce your tax bill by deducting the property taxes that you pay to your city or county on your income tax return.
Another way to potentially minimize your property tax obligation is to appeal the assessed value of your real estate. If your local government's assessment of your home is higher than you believe is warranted, you have the right to appeal. In most cases, the exact steps required to appeal the decision are listed on the back of the letter informing you of the assessment.
Lowering your property tax liability is definitely possible, but it often requires the help of a legal expert due to the complex laws and regulations involved.
Contact a property tax attorney to learn more.Share
24 August 2022
Many people assume that when they file Chapter 7 bankruptcy, they will have to give up their homes and other property. This is not necessarily the case. I am a bankruptcy attorney, and I have helped many clients file for Chapter 7 bankruptcy without giving up homes, cars, and other property. When you file for bankruptcy, the property you are allowed to keep depends on your individual circumstances and the state where you live. Most states allow exemption for property you are currently paying for. This blog will guide you through that information and help you determine if filing Chapter 7 bankruptcy is the right choice for you.