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Turnkey Real Estate Investing

3 min read

Tips For Lowering Real Estate Taxes

Wed, Apr 10, 2013

For counties and municipalities across the country, property taxes are the gift that keeps on giving. In both good and bad times, American cities and counties seem to find a way to burden their residents by raising these pesky levies. Since mortgage lenders often automatically shunt future property tax payments into escrow accounts each month, many equity-building homeowners don't even focus on the fact that they're paying hundreds or thousands of dollars per year to their local governments.  This year, Shelby County, Tennessee, which is the county where Memphis is located, is assessing the value of every property and adjusting rates.  Some are going up and some are going down.  Event though we manage close to 1,600 single-family rental properties in Memphis, it makes sense to think about our own homes tax appraisal.    

Fortunately, there are a few easy tips that you can follow to lower your property taxes in a meaningful, sustainable way. Read on to learn more about how to fairly lower the tax burden on your home.

1. Estimate Before You Build

While it can be nice to reward your family with a tasteful add-on or structural improvement to your house, such a move may also raise your home's assessed value by a significant amount. Before you commit to building an addition or even adding a finished basement or bonus room, check with your city or county assessor to determine the amount by which your project will increase your property tax burden. Be sure to nail down the estimate before applying for a building permit. If you do apply for a permit and then decide not to build, your local assessor may assume that you've completed the project anyway and raise your taxes accordingly.

2. Be Courteous to the Assessor

A little kindness can go a long way. Although it's legally permissible to do so, you might be setting yourself up for a major disappointment by refusing to let a representative from your local assessor's office into your home. It's likely that your shut-out assessor will assume that you have something to hide and raise your property tax burden by an arbitrary amount. Once this happens, you'll need to file a time-consuming protest with your local tax authorities.

3. Don't Go on a Cleaning Spree

While you should certainly treat your assessor as a respected guest in your home, you don't have to make the place look perfect for him or her. When the time comes for your scheduled appraisal appointment, make sure your home looks suitably "lived in."

4. Follow the Assessor

There's no law against matching the appraiser step-for-step as he or she moves through your house. In fact, shadowing the assessor's representative may offer you the chance to explain certain improvements or contest particular assertions that he or she makes. Feel free to take pictures in anticipation of a future protest hearing.

5. Compare and Contrast

Since property assessments are never conducted in a vacuum, it can be helpful to compare your home with the other properties in your neighborhood after your assessment. If you find a significant discrepancy between the assessed value of your home and the assessed values of similar homes around the area, you could have grounds to mount a formal protest with your local assessor's office. If it's possible, use the local MLS database for this project.

While it's unlikely that you'll be able to evade full responsibility for paying your property taxes, you may well be able to reduce your burden by following the tips outlined above. With these simple tricks in hand, you could save thousands of dollars during your tenure as a homeowner.

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Guest Post Author Byline:

Trae Mindiola is a partner of the tax assessment company Republic Property Tax. Their team of experienced professionals is expert at property tax appeals for commercial and residential properties. 

Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at REI Nation, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.