At Real Property Management Utah County, we counsel all of our landlords to take the time to do this because they could discover that the assessment is too high, which once re-evaluated can lead to reduced property taxes. There are several ways to decide whether your current property assessment is correct.
How a Property Should be Assessed
Properties are typically assessed by a town or city’s assessor annually. In many cases, the assessor reviews the current status of your property and any improvements done and the current market conditions for similar homes in your area, and then they multiply that by the area’s level of assessment as determined by the municipality. If you own a multi-family building, the assessor will factor in the income collected from the property over the past year minus maintenance costs into the valuation. The cost of replacing the home is also a consideration in deciding its assessment.
If you open your yearly property tax bill and nearly collapse from shock at the figures, take a few deep breaths and then carefully think of the options you have to lower the tax bill. One thing to consider, however, is that you’ll have a deadline to dispute the assessment. Most municipalities will give you 30 to 60 days after you receive the assessment to challenge it.
How to Understand an Assessment
Observe what the assessment says about your property. You might find that you’ve suddenly become the owner of Lehi property that is nothing like the one you own. For example, the assessment might incorrectly give your house four bedrooms when it only has three, or place your address in an upscale neighborhood near your actual location. In one case, a homeowner’s one-story home with vaulted ceilings was wrongly listed as a two-story house and charged double the actual square footage because the assessor viewed it from outside rather than doing a more detailed assessment.
The value of similar properties in your neighborhood can inform you regarding your own property’s assessment. If you are friends with your neighbors, you may be able to learn from their assessment. Otherwise, it’s a good idea to compare your property with four or five in your general area that have the same amount of square footage and the same property size.
Look into Exemptions
While you’re taking the time to ensure the valuation of the property is correct, also investigate whether you’re receiving any exemptions to which you’re eligible. Several states and many municipalities offer breaks to owners who are senior citizens or veterans, homes located in certain areas, and other various exemptions. Your local tax assessor may be able to help you find any tax breaks for which you’re eligible.
If your first tax bill after you purchased your property shows that its tax assessment value went up by nearly 50 percent in one year, as happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Most tax assessors are prepared to informally explain your assessment. If you’re not happy with the informal explanation, you can submit a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments substantially.
When you work with Real Property Management Utah County, we help you get the most out of your property and lead it to success. To learn more about the services we offer, contact us online or call us at 801-224-0033 today.