Paying Your Property Taxes Many people pay there property taxes in the tax year and claim there taxes on their income taxes for that year. For example, the year 2007, you receive your property tax bill in December and pay the tax immediately. You can then claim the property taxes on your income tax. If your wait until January of 2008, you will have to claim the property taxes for 2008. There are different reasons for paying your taxes right away and there are reasons for waiting until the following year. Deciding when to pay your taxes may be determine by thinking about your current tax liability. If you are in a higher tax bracket in 2008 than you are in 2007, you may want to wait and pay your property taxes in January of 2008. This will help lower your total tax liability in 2008. If you are in a higher tax bracket for 2007 and expect to drop into a lower tax bracket in 2008, you may wish to pay your property taxes in December of 2007 so you can claim it on your income taxes to reduce the tax liability for 2007. Other reasons to wait or pay your taxes may also include other deductions you may or may not have in a given year. Everyone has different circumstances for needing to pay property taxes in a given year. If you usually pay your property taxes with an income tax return, you need to make sure that you receive the money before the deadline established by your community. If you fail to pay the taxes on time, you will face a penalty and some interest charges. This is so even if you miss it by one or two days. It is always wise to have an escrow account either established by your mortgage lender or one you have yourself in the bank. When you pay your property taxes, you should make sure to receive a receipt. This is needed for your tax records as well as showing proof of payment if the community would ever say you still owe money on your taxes. After paying your property tax bill, you can then claim it on that year's tax return. People who are low income and can apply for a homestead credit will need a copy of the tax bill to send to the state agency that handles the homestead credit. If two people are on the tax bill and only one is claiming the homestead credit, that person does need to meet the requirements for total income. There are different guidelines to follow for this type of filing. You can submit a homestead credit request even if you did not pay the property tax for the tax year you are claiming. This stated on the homestead form itself. Now, this may be different for every state, therefore you need to read your homestead form very closely. Some states may require that the property tax is paid and some may not require proof of payment. Understanding Your Property Tax Bill The first thing to understand about your property tax bill is the terminology. Many people look at the tax bill and see a bunch of numbers that have no meaning to them. In reality, they do have a special meaning to the property owner. If you do not understand what the sections on your property tax bill mean, you might not know if this bill is correct or not. Here are some terms that you need to understand when looking at the tax bill. Fair cash value is what the property can be sold for between two parties without any duress. The assessed value of the property is what the city or county deems a fair assessment of what the property is worth. This is figured out by comparing your property to similar properties in the same area that have sold recently. Exemption means the removal of said property from the tax base, this is only a part of the assessed value of the property. This might hold true for a church that is only used for religious activities. It may also be due to a homestead exemption. If it is for a home that is considered a religious property for worship only, you can claim the tax exempt status if you only use it for church activities, no personal use. When you look at the property tax bill, you will see the tax rate. This is the tax due on the property after being calculated with percentages of the tax base. The term taxing district represents the schools and local government that has the levy against your property taxes. The tax code is used for office purposes of the county clerk that represents a combination of taxing structures or bodies. For those who have a lottery, you will see a section where it states that you are receiving a lottery credit, which will lower your total property tax due. Everyone in the county receives a lottery credit and that is why the credits are usually very small in amounts. The lottery credit will affect your total tax due and not the tax base. Once you understand the property tax bill terminology, it does make it a little easier to understand the bill. If you do see problems or you have issues with the tax bill, you can request a property tax appeal with the help of a property tax lawyer or consultant. It is always wise to consult an attorney before taking such a step where property tax and the government are concerned. If you see that your lottery credit is missing or different from others, you might need to question this or question your assessed value of the property. You might even have questions regarding the fair market value of your property. You can always question the bill before paying it, if you do not receive answers that you understand, visit a property tax consultant and see if they can help explain the answers you need to your questions. Property Taxes For Rental Properties Property taxes for rental properties are normally higher than single-family properties. This causes much confusion for property owners in any state. They cannot understand why they are subject to higher property taxes since most are not making a profit on the properties in question. With people buying two family houses to help with the mortgage payment and property taxes, there are some frustrations over why they have to pay higher property taxes. Many property owners feel they are being singled out for trying to own a property for their family while providing housing for someone else as well. The general rule for property taxes is that if you have a two family home, you are paying property taxes for two families in that taxing district. The home will be compared to other homes similar in structure as well as recently bought and sold homes to arrive at a fair assessed value. This however does not affect your status for taxes, the rates applied by the taxing committee is where your assessed value is used to calculate the tax due on the property. You should be able to find a calculator for taxes online that can give you a better idea. This is where they get you for owning a two family home. You can find out more information at your local taxing office as to how they calculate tax rates for single and two family houses. Even if you are paying more property tax, you have more tax deductions allowed than a single-family homeowner does. This may were the taxing office justifies there taxing structure. Property taxes for rental properties are higher but you can claim depreciation on appliances if you supply them in the rental as well as any other furnishings. You also are able to deduct any advertising expenses, repairs, maintenance and weather related upgrades. You can also deduct insurance, cleaning expenses and supplies needed to keep the rental unit livable. With the added deductions that a single-family homeowner cannot deduct, the taxing situation may be evenly split. Another thing to keep in mind when buying a two family house verses a single family house is that you have someone to help you pay the property taxes were a single family owner does not. If you do not make any type of profit, it may be because you are not charging enough for rent. Remember that the rent you collect is claim on your income taxes as well. Two family homeowners do have more advantages than a single-family homeowner, but not where property taxes are concerned. If you are paying property taxes on rental properties that you live in one unit, you can talk with the assessors office to see of there is a lower assessment value for owner occupied rental properties. In some states, there are provisions for two family dwellings if the property owner occupies one unit. You just need to check with your particular community to see if there are any special guidelines for this type of situation. You can also view other property owner's tax bills at the assessor's office to compare assessed values and tax liabilities. 5 Sneaky Ways To Lower Your Property Tax Many property owners do not want the city assessor to come into the interior of their building. If you have done extensive work, well, then okay, you have a reason. If you have done no repairs and feel the interior of the property is a bit to be desired, you may wish to invite the assessor inside. Make sure you are available to walk around your property with the assessor and point out the bowed walls because the roof needs to be replaced. Point out the unleveled floor because the property has shifted a bit over the years and probably needs some support beams. Point out some good things as well, never dwell on just the bad points. This might help to lower your assessment, thus lower your property tax liability. Look at your tax card at the county assessor's office. You might find some interesting things about the assessment of your property. In a home, the assessor may include a room as a bedroom, but in all reality, you cannot fit a bed in the room. You can also see if they note any improvements or structure damages. If you see any information on the tax card that does not appear correct, talk to the assessor and have the corrections made. This is going to help lower your property tax liability as well. If you think an in ground pool will benefit the family or a deck for fry outs, or maybe even a larger garage, you might think twice. Any permanent structure that you place on your property will increase your property tax liability. You might consider a nice above ground pool, a backyard barbeque area and forget about the larger garage. This will help keep your assessment value lower, this is a big plus to lower your property tax liability when the assessor comes knocking. The next way to lower your property tax liability is to keep your decorating ideas at a minimum. Although assessors do follow a set of guidelines for assessing your property, something that looks like a splendidly elegant property will play a role in the assessment. You may find yourself with a higher assessment than a property similar because your property is elegantly decorated. You can decorate, but when the assessor comes to inspect and judge the property, you might not want to impress him or her. The next thing you can do is know the neighborhood. Sometimes viewing similar properties just like your property may show you some inaccuracies as far as assessed values. Sometimes mistakes are made and you can point this out to the assessor. If you find a property exactly like your property, except it has a larger garage, newer windows, a shed or even a deck and it is valued lower than your property which has none of these things, you might consider calling this to the assessor's attention. They can and do make entry mistakes as well as observation mistakes. You need to do some checking and thinking before the assessor comes to visit your property. Are You Entitled To A Property Tax Reduction If you bought your house for $79,000 dollars nine years ago and have never done any work or repairs, is your property still worth the assessed value of $106,000? More than likely, the property is not worth that much for a home built in the early 1900's. To be honest with yourself, you have to look at other houses with the same age and structure to see if you are paying to much money for property tax. A property tax reduction is not as easy to obtain, as one would think. If a mortgage appraiser over exaggerated the fair market value price of your home so you could get the refinancing. Could this affect your assessed value? It might not play a big part in the assessed value, but it is considered when rendering the final assessment. If your fair market value is $105,000 and it was overly appraised, when you try to sell it, you are going to lose money and still have a balance due on a mortgage payment. If a reputable appraiser says your property is only worth $80,000 then you are not going to receive $105,000 for that property. If you property taxes are assessed for a house worth $105,000 and the property is only worth $80,000 on the market, you need to find a tax reduction and quick. You are over paying your taxes by hundreds of dollars in most cases. The best way to find the true value of your property is to have an appraiser come in, do a full inspection, and give you a report. If this report shows your property is lower than the assessed value and the fair market value, you have something to present to a taxing committee. If you avoid doing this, trying to sell a property that is over exaggerated in price is not going to be easy and when they see the property taxes, potential buyers could decide this is a bad deal. You should always try to have an assessed value and a fair market value close in range. If it is, then your property taxes should be fair. If the values are extremely different, you need to rectify the issue as soon as you can or you will continue over paying the property taxes. Appealing the property tax bill is one way to see a property tax reduction. A property tax reduction also comes from applying for a different status on your property tax bill. If you bought a two family home and converted it into a single-family home, you are entitled to a reduction in property taxes, only if you did not increase the value of the property. Single family and two family properties have different tax rates. You can have this adjusted by visiting the taxing authority and filling out the paperwork to change the classification of the property. Once this is accept by the committee, your property will be reassessed and a different tax rate will be used to determine your new property tax liability. Your Property Taxes And A Property Tax Auction If you fail to pay your property taxes when they are due and continue to avoid paying them, you stand a good chance of accumulating penalties and interest. After a given amount of time, the county office can place a lien on your property. If you continue to avoid paying the property taxes, you home can succumb to the auction block. This can be done even if you owe an outstanding mortgage on the home. You or someone else is going to have to pay the outstanding balance owed on the property taxes. It is always best to pay the taxes, but if you do not, an auction can take place. How the auction works is the county decides you have had ample time to pay the property taxes and you have made no effort to do so. They will then notify any lenders of intent to auction your property to recoup the taxes monies owed. Once the process starts, you still have time to save your property before the day of the auction. If you have the resources, you can apply monies to the delinquent property taxes and have your property taken off the auction block. Once your property is deemed delinquent in property taxes, the county will add this information into the file with other properties that are going up for auction as well. Once this procedure starts, there is only one way to stop it, you have to pay the taxes and have it taken off the list. You will have to pay the penalties and any interest that has accumulated over the years. When you have a receipt stating payment has been made, your property is then safe from auction and you retain ownership. If you do not pay the property taxes, the auction will go as planned. People sign up to participate in a property auction and are allowed to view information about the property before bidding starts. Many bidders will search the title to see if there are any other lien holders on the property in question. Even if you are a mortgage holder, your property can be auctioned off. The legalities of a mortgage are more intense then the auction itself. The county will put a minimum limit requirement on the property to recoup as much of the tax owed as possible and allow bidders to bid accordingly. Once some wins the bid, you have a new situation to handle. Chances are, the winning bidder has searched the title and now knows who the mortgage lender is and where to reach them. The winning bidder does have a stake in the property and now it is a matter of obtaining the property from you as the owner in a legal sense. This is procedure is going to be lengthy and costly in some cases. You are wise to contact a property tax attorney before you let this matter get this far, because you will have more problems now than you had before with just owing property taxes. Where Does The Property Tax Money Go When you pay your property tax, it is paid to the clerk's office where it is then placed into a special account until it is divided up between school districts, city and townships, and the county. There is a portion of the tax dollars that is directed to other districts, which might include a nursing home owned by the city, county, or something similar that requires tax dollars to operate. Fire, ambulance, parks, libraries, and others receive a portion of the tax dollars as well. How much each group receives is different for every state and community. However, the highest pay goes to the school districts and then the city, county and townships. What Does The School District Do With The Money The school districts use the money to pay teachers, supervisors and custodians. They money is also used towards school lunch programs as well as the new breakfast programs some schools offer. Anything related to building a school, up keep and remodeling is all funded with tax dollars. Some of the money is used for books and other supplies needed in the school for computer classes, woodshop, home economics and science materials. The money spent by schools is for bettering the education of children. Other Districts That Use The Property Tax Money If your county has a county owned nursing home, some of the funds are directed at the nursing home for up keep and salaries as well as needed supplies not covered by the state. Fire and police also use some the tax money for buying new cars, special equipment and salaries. Libraries and park systems receive monies for operating costs and up keep of the buildings and grounds as well as salaries. Ambulances that are operated in the county are given a small portion of the monies for operating costs. Cities, Counties And Townships Cities, county and townships use the monies for paying government salaries and funding different building projects as well as up keep of some roads. The money is also used to clean up highways garbage collection and some cemetery up keeping if the community owns them. The communities use the monies for many different things and every community and state has different laws governing the use of the money collected from property taxes. The overall picture about where your property tax money goes is vague. Every state and community has a board called a finance committee that designates where your property tax money goes and how it is spent. Just because the school district receives so much money, they still have to explain to the committee why they need the money and they have to present a proposal to the committee. The committee then votes on the use of the money, either grants or denies the use of the funds. In some cases, a small portion of the funds requested may be released depending on how the committee votes. All funds are voted on before being released to any district that has money set aside. When Selling A Property, Who Is Responsible For The Property Taxes When you are selling a property and it is in the middle of a property tax year, the seller is responsible for the property taxes up to the day of closing after which time the remaining tax is due by the buyer. Now some people are very unaware of this fact when they close on a property and usually find out at the closing. The seller will bring a check along for their part of the taxes and the seller's mortgage company receives the check, which is deposited in the buyer's escrow account. This however is only one option presented for coving split property taxes. Many times the seller's mortgage company will keep the funds and send it directly to the property tax office at the appropriate time of year. This rare of course, but has been done in the past. It all depends on the new mortgage company for the buyer and the mortgage company for the seller. The proper way many believe is to give the monies to the buyer's mortgage lender and have them send the check to the property tax office by passing the intermediary, which is the buyer. This ensures the buyer's mortgage lender that the money is indeed going for the property taxes. You might wonder how they divide up property taxes and for a year. The mortgage lender of the seller will take the total property taxes owed from the past year and divide this by twelve months. After finding a monthly amount owed every month, they then will divide the number of days in the month of the closing that the buyer had the property in their name by the monthly amount. This will give a prorated property tax amount owed by the seller. The same is done to calculate the remainder of the months for the buyer. Who Receives The Lottery Credit If There Is One The lottery credit is usually awarded to the buyer. If the lottery credit is smaller than the previous year, you may have to add some money to your escrow account to pay the property taxes. If the lottery credit is smaller, you may see a small refund coming your way. This amount however is never very much, it could be as high as fifty dollars or as low as five dollars that you would owe or receive a refund for unless there are other circumstances you are unaware of with the taxes. You never have to worry about the property taxes when a property change takes place, the mortgage lenders would not allow the seller to forget about their share. There are officers of the mortgage company that have special jobs and one is the property tax issues and insurance as well. Your first year of property taxes is always your best, it can change after that, especially if they raise your taxes after a sale of the property and you are not escrowing enough money to cover the raise. Your mortgage company made alter your monthly payment to cover this issue. What To Bring With You To A Property Tax Attorney When you schedule an appointment with a property tax attorney, you need to go to his office prepared. If you do not take along all the necessary documents and information, your first visit may be a waste of time and money causing a return trip with added fees. When you call the property tax attorney, you need to give your full name, property address as well as how to contact you if needed. Being prepared is very important when dealing with any tax information. The lawyer needs to know everything about you in order to help you. You may even need to supply information about your business if you have issues with a commercial property. The attorney needs to know you completely if they are going to represent you to their best of their abilities. Many property tax attorney's will have you fill out an extensive questionnaire before arriving at their office to cut down on time spent getting to know each other. This benefits you and the attorney. The more information the attorney has about you before the first meeting allows you to get down to business. You will want to bring a copy of your past years property tax bill and the current year property tax bill. This is needed if you are having any issues with your tax bill. If you have a home or a commercial property, you will want to have all documentation pertaining to the building itself. If you are concerned about high property taxes or even the assessed value, you might even save time and find some information about other properties with equal fair market value that are lower or even higher than your property. The more information you have the faster the meeting will progress. This sis important if you are trying to save some time and money. You may even have your own questions for a property tax attorney to help you decide if he or she is qualified to help you with your tax issues. You may want to know if the attorney has handled any cases similar to your case, how many of the cases were won and loss as well as what expertise he or she has in the field of property taxes. You may also want to know what the attorney thinks your chances are for winning your case after you going over all the details with you. When you hire a property tax attorney, you want someone that will be there to represent you and tell you the facts no matter if it is good news or bad news. Once you establish a good relationship with a tax attorney, you should have a truthful working arrangement. The tax attorney can take you step by step through the processes that are needed for your particular tax issues and tell you approximately how long it should take to resolve any issues. Once everything has started, you should not switch attorneys or it could upset the process up to that point. What Really Affects Your Property Taxes The first thing that affects your property taxes is the spending habits of your school district, other taxing districts, county and city. If the school district has big plans for renovations, new computers, raises in salary or anything else pertaining to the school district, you may see an increase in property taxes to support their spending. Keep in mind that there is a point when the state draws a line on how much can be charged to your property taxes. Many school districts have to find other means to accomplish everything on their agenda because they are only allowed so much money from taxes. The next thing that affects your property taxes is the assessed value of your property. Many states call this the market value of your property. Although fair market value and the assessed value of your property are different, this does affect your property tax. If your property is compared to other properties of the same structure in your area that have sold or been built, you may see an increase in you assessed value of the property, which when used for calculations will raise your property tax. This makes some property owners outraged because they know they could never sell the property for that amount of money. Another thing that affects your property taxes is the changes to tax laws, state aid formulas and classification rates by the legislation. This has a big impact on your property taxes after an assessment of your property has been concluded. You may see a huge jump in property taxes when the legislative committee approves a tax hike. There is no way around this for property owners, unless you challenge the assessed value of your property through an appeals process. However, the classification rates and tax laws cannot be affected in a property tax appeal. If your county has any type of referendum to vote on that can raise taxes and it is voted for, this is also going to affect your taxes. It could raise your tax liability a small amount depending on what it is for and what amount is needed. This is the main reason that most referendums that come up for vote by the voters is voted out. Property owners do not want to pay more than what they are already paying in property taxes. Again, depending on the state you live in or even the county, you might see an addition to you property tax bill for any road or sewer work done in the prior year in front of your property. This amount is usually split between all the property owners in the area where the work is done. This does happen quite often, which is one reason many potential buyers look for properties on newer streets that have had necessary work already done. These are all things that affect your property tax bill. For the most part, you have no way to avoid the increase in tax or paying the tax. You can use an appeal process depending on which part of your tax bill you are questioning. What Is Included In Personal Property Tax Property tax and personal property tax is different because the property tax deals with the building and land. Personal property tax deals with vehicles, boats, planes and other motorcycles. Any type of artwork is subject to personal property tax. If you have a business, any of the inventories is subject to personal property tax as well as bonds or any stocks. The only thing not subject to tax is household goods or personal belongings. The state rather than the community governments more commonly do personal property taxes. Thus however, may be different from state to state. In some states, local counties send out personal property tax documents to businesses that are to be completed and returned before a certain date. This personal property amount is then used to determine your next years tax due. For example, a tavern owner, claims everything he owns in the building such computers, cash registers, bar stools, bar lights, mirrors and any games as well as televisions. If you own the building, then you would also claim coolers and other things in the bar. If you do not own the bar and are just leasing the business you do not claim the coolers or anything else that belongs to the owner of the property. The person that owns the building may also include bar equipment with the lease that are customary to a bar business. The owner might own the bar stools as well, then the owner of the building claims these items and not the business owner. Personal property tax is sometimes tricky if you do not understand what you need to claim and what is not claimed. The difference between owning and renting the equipment is another issue where people do not know who is responsible for what. For a person renting a building to run a business, you will claim the things that you own and the property owner will claim the things in the building that he or she owns. This is the easiest way to look at a business personal property tax. Never claim anything that is not yours. If you rent pool tables or video games from a company, you do not claim these as well. The company that supplies them to you claims the games. If you have any questions about depreciating your personal property, a tax consultant can help you with this process. You must try to be as exact as you can when figuring out depreciation of personal property. If you have a television set that you bought for $195 three years ago, chances are it has a value of only $25. This is just an example, but you understand the process better. You never want to give a value for something that might be higher than what the item is really worth. This could cause your personal property tax liability to be higher than it needs to be. If you do not understand depreciation, you should always seek outside help to find out actual value at the time. What Is A Rental Property Tax Deduction A rental property tax deduction is any expense that evolves from owning a rental property. If you spent money to maintain, conserve and manage a rental property, you can use that as a property tax deduction. The most common deductions will be yard care, maintenance, repairs, insurance payments, cleaning and the mortgage payment if there are any. Some other property tax deductions that most people forget about are fees for an accountant, fees for a lawyer, expenses for finding renters, fees paid to rental agencies for finding you a renter, any mileage that is accumulated for said property and depreciation for items included in the rental and of the property itself. Depreciation Of The Property And Items In The Rental Unit The depreciation of items in the rental unit may include anything you supply to the tenant such as appliances, furniture, blinds, curtains and other items you might supply for a tenant. You can use these items by depreciating them accordingly. The property depreciation is usually done over a longer period. This is an area for your accountant to handle since they have more experience with depreciating items and properties. You want it done correctly and at the proper time. Agency, Lawyer And Accounting Fees If you use a lawyer or an accountant for your rental property, you will use the fees you pay to them as a rental property tax deduction. This is also true for any fees paid to a rental agency that you use to find and scan potential renters. All these fees are tax deductible. This is also true for any advertising you do yourself to find a renter or tenant. These fees are deductible on your taxes. Mortgage Payments, Insurance Payments And Property Taxes If you pay a monthly mortgage payment, you can deduct the payment on your taxes. You will also deduct your mortgage interest and property taxes in another area of the tax forms. The insurance premiums that you pay on the rental property are also deductible. This includes any special insurance you need for flood or other weather related issues. All Other Rental Property Deductions If you pay someone to do yard work or shovel snow, you van deduct it as a service rendered. For a cleaning service, you will deduct this as well. If you do any repairs or any type of maintenance on the property, you can deduct this as well. Remember to keep track of all the miles you drive to and from the property or to stores to get supplies for work done on the rental property, these miles or actually a percentage of them are tax deductible. Because a rental home is just like a business, you are allowed many more deductions than if you were to just live in the house yourself. In some cases, this makes sense, but in some cases, it causes more paperwork and you have to keep the property in working order just as you do with any profitable business or you will lose your investment. What Is A Property Tax Consultant Property tax consultants are similar to property tax attorneys except they have no special law degree, but do work to achieve results. You can use a property tax consultant to reduce or protect your taxes on a property. They can help you with filing the paperwork for an appeal, help you find all the necessary documentation and they will attend all the hearings with you. Most of the property tax consultant company's have their own qualified appraisers. The consultants have valuable resources for obtaining needed information before entering any property tax hearing so you are prepared. Property tax consultants have to be properly educated to work as a licensed tax consultant. To become licensed, a consultant needs to file an application with said state, understand and commit to the code of ethics, submit to a criminal background check and complete the required education that the board approves for all property tax consultants in every individual state. After all of these requirements are complete, you are then certified or denied a license to be a tax consultant. A lawyer however just has to apply for a tax consultant license since they have had the law school training. To become a property tax consultant, you need to have a high school diploma and at least four hours of continuing education classes that pertain to the legal system. A company that has a senior tax consultant also must employ the applicant and you need to pay the registration fees. In some states, a licensed real estate broker can apply for and receive a property tax consultant license as well. Should You Use A property Tax Attorney Or A Consultant This is a question that is best answered by asking yourself, who will service you better. In most cases, both will be suited for the work. The attorney may cost more, but they both can do a superb job of helping you with any of your property tax issues. The consultant may be dedicated to your particular case, where an attorney may have many clients to work with at one time. The choice is really up to what you want and who will make you feel better about doing the work. Most consultants work with their own appraisers, which makes it easier to get the results you need faster than if an attorney, has to wait for a company to become available. In either case, you can choose someone that is qualified to help you dispute your property tax bill or any other issues you may have with the bill. Keep in mind that if you use an attorney or a tax consultant, you will still have to pay them to represent and help you with the process whether you win your appeal or not. This is true in almost all cases, unless you find a company or attorney that guarantees results or you do not pay. This is however very rare for professionals that are established in the business and have a reputable business practice.
What Happens At A Property Tax Auction If you have a property that is delinquent on property taxes, the city or town that the taxes are owed to will hold a property tax auction to sell the property in question and redeem the delinquent taxes. This type of auction is not as common in some areas as it is in others. Many times, a property owner who owes back property taxes will try to raise the monies before the property tax auction and keep ownership of said property. In some cases, the properties are sold. In many cases, the amount owed in delinquent property taxes is so low, that the buyer is receiving an excellent deal. To bid on properties at a property tax auction, most states require that your register prior to the start of the auction. Once you are registered, you are given some details about the property and times and date when the property tax auction will take place. Once the auction begins, you will have an ID number, which will represent you as a bidder. As the auction proceeds, bids are entered until the final bid is received. After this time, a winning bidder has so much time to produce the monies to pay for his or her bid and take control of the property. There are some things to check before attending a property tax auction, which will protect you if you decide to bid on the property. Check with a title insurance company to see if there are any other outstanding liens on the property. If there are, you may want to find out the amount and if it is possible to clear them with payment or if the owner has to clear these liens up before you can take control of the title. This is done to protect you from buying a property and later finding out that you cannot take control of the title. Many people forget this simple step and have ended up paying more than expected to take control of a title. If the title is clear of any other liens, you should have a title in your name within a month's time. You may also want to discuss this with a lawyer prior to bidding. Most auction companies do not have access to a title company for verifying the title. If you find that the title does indeed have liens or other assessments against it, you can back out of the deal, however, this is another lengthy procedure. Before bidding on any property, you should pay to have a title search done to protect yourself. If there is a loan company attached to the property, you may be responsible for mortgage payments that are due on the property. Title searches do cost some money, but you might be able to find out some of the important information from the local clerks office if they have open records, which most do. You can then see if there is a mortgage attached to the property and the name of the lender. Using A Property Tax Attorney If you are concerned about any of the statements on your property tax bill, especially the property tax assessment value, you might want to consult with a property tax attorney. Although you can do the process yourself, you may feel overwhelmed by the legalities and find it necessary to have help. You can look in your local phone book under attorney's ad then look for a lawyer that specializes in property tax issues. You may need to talk to a few attorneys before you find one that can help you with your case. The property tax attorney can also help you if you owe delinquent property taxes. They can help you save your property from a property tax auction. Whether you need an attorney for fighting a high assessment value or for help establishing a payment plane to pay delinquent taxes, you should find one that specializes in these areas. A divorce lawyer or a estate lawyer may not be the best choice in this case. You need someone that understands the tax laws, and has dealt with property tax issues. This will benefit you more than you could understand. Someone that knows the tax laws is more qualified. Some people may feel this is extreme for lowering your tax liability, but when you consider the years of taxes paid at a higher assessment rate, you are better off paying an attorney with knowledge and a proven record of accomplishment than paying several thousand dollars over the course of many years. Property assessments are not done every year and when they are done, they very rarely go down, but rather they go up. This will cause problems if you decide to sell your property. Many people look for the assessed value as well as the fair market value. If you need a property tax attorney, you will find that they are qualified in most areas of the laws governing taxes. You may use a tax attorney to reduce your tax liability on county taxes due, if your property is tax exempt and the bill says that is not. You can also use a property tax attorney if you find your tax bill states your home is a two family home rather than a single family home. This matters because, you are suppose to have less tax liability for a single-family home than a two family home. The property tax attorney will need all the available documents. The attorney will more than likely ask a private company to do another assessment of the property. This just ensures that you have grounds for an appeal. If the private company finds the assessment to be accurate, you might need to reconsider your appeal. If the company feels the assessment is over what your particular property is should be assessed at, then you will use this report as part of your argument for appealing the property tax bill. You always need to think about this before jumping in, you want to have the information you need before filing any papers with the community. Two Different Assessors Affecting Property Taxes Is it possible to have two different assessors give two different assessments of two same properties? Unfortunately, the answer is yes. Even though assessors follow guidelines, everyone sees something different. One assessor may see your property as a little run down and assess a lower value while another assessor assessing a property very close in looks and structure to your property may see it as worth the money and give a higher value. This in turn causes confusion for property owners. Even though they follow the same guidelines, their tastes are different and results in two different assessment values. If you would find this discrepancy, one thing to do would be to discuss it with the assessors or find a third party assessor and have him or her assess both properties and see what the final results are and how if any they change. This would be something to consider if you are thinking about appealing your property taxes. Another way to avoid paying for a third party assessor would be to ask the same assessors to assess each other's properties to see if they differ. This probably will not happen, but it is worth it to ask. When using this information in an appeals case, you would want to have all three assessments and other assessments that were done the same way your assessment was done. The committee looking at the assessments may see a problem with having two assessors assessing the same so to speak properties. If this news or findings would spread throughout the community, the registrar's office could see more traffic than the post office on the last day of the tax season. It could prove to be a nightmare that the community would want to avoid. Two different assessors with two different assessments of properties are going to affect property taxes for all property owners. The only way to avoid such a commotion would be to have one assessor, or have multiple assessors and advise the community of this fact and let them decide if they need to check their report and others that match their properties to see if they may have a reason to request an appeal. This would be the fair way to make everything even. If a property owner does not wish to take the time to compare, it is their decision and they made it, it was offered which is only fair. Keep in mind that different assessors may have also gained entry into the home while another may not have had access. This does play an important role in assessing a property, although it real should not. If you decorate your property to be elegant and receive a higher assessment from the other property owner, you might point out, that if you move, it will just be another empty shell of a property. This might just work when you are touring the property with the assessor as they evaluate your property, but may not work in an appeals process. The Stages Of A Property Tax Appeal Process There are several steps for the property tax appeal process. The first step is to determine if you are receiving a higher assessment than what you believe the property could sell for in this period. If you feel the assessed value is high, you can then take the first step towards appealing the tax bill. If you do not succeed on the first level, you have two other levels to appeal to before taking the final step in a courtroom. The first thing to do is appeal to the local board. The local board consists of the members who govern the community that you reside in and are the ones who approve the assessment. In writing, you will submit your claim to the county or city clerk stating that you are appealing your assessed value on your home. This has to be in a certain time and every community has a different ruling on the deadline for this process. You will need to provide proof that the assessment of your property is to high. You will also need to fill any forms that are deemed necessary. You will be notified in writing what the decision is about your claim. If they denied your claim, you may take the second step, which means appealing to the county board. This is comprised of county commissioners. In writing, you must submit a letter of appeal for the property in question. Again, there is a deadline for doing this after the local board denies you. You will receive notification of the hearing. If this board denies you a lower assessment of your property, you can then take your case to the Office of Hearing Examiners. After they receive your letter of intent, they will set a hearing date. If this level of the community denies your claim to lower the assessed value of your property, you can then take it to court and be heard by a judge. You will have a certain amount of time after being denied by the Office of Hearing Examiners to partition the court for a hearing. Once you are granted the court hearing, you need to get all your vital information together and plan your testimony as to your reasons and why you are requesting a lower assessment value for your property. During this proceeding, the judge will hear both sides of the argument and after considering all sides, the judge will make a decision whether to lower the assessed value of your property or resolve that the amount of the assessment is justified. This of course, is going to be the final decision. If you have any questions, you should make sure to ask an attorney if you are not using one to represent you. It might just be that you are asking for a great deduction in the assessed value than what the courts and the other boards feel is to drastic. You might have to consider changing the amount you feel is justified, and settle with a higher amount, but one that is slightly lower than what the original was. The Lottery And Your Property Taxes Property taxes in some states come with a lottery tax reduction. This is because the state and the lottery have a deal that states that so much of the money spend on lottery tickets minus the winnings pay out is to be used to reduce the property tax of the property owners in the state. Some years, you may see forty dollars and another year you might see ninety dollars. The amount is determined by how many property owners there are and how much profit was made by the lottery. This also weights heavily on the type of property you have as well. Whether you play the lottery or not, you are still entitled to a lottery tax credit. This does help lower the property tax, but it is not something you can rely on every year. You might see a ten-dollar lottery credit one year and the previous year it may have been eighty dollars. Since you expected another good year, you have to add to your property tax payments out of your pocket. Now when the credit is substantial, you can pocket that money. Mortgage lenders do not plan your tax escrow to include or exclude lottery credits. The reason is that it is not a guaranteed amount or even guaranteed that there will be one in any given year. Every state has different amounts. Just as with life, not everyone in every state plays the lottery as in another state. Your neighboring state to the west may give their property tax payers two hundred dollars this year, while you will only see twenty dollars. It all depends on the states yearly sales and profit. The state to the west may have a higher gambling rate than the people that live in your state. This is why mortgage lenders do not rely on lottery credits when establishing your property tax payments every month. Lotteries can be great for property owners, but if you are one who gambles and spends a great deal of money on it, you may not come out ahead either way. Yes, some states do allow you to claim gambling losses up to a certain amount, you should also have winning amount. Therefore, this does not help someone who gambles. Many renters have raised objection to the lottery credit because they do not receive one and they are gambles as well. This will be an issue that will never go away. Not all people who gamble are homeowners and they still receive a credit, but you have to own a property to receive the credit, therefore, renters are not benefiting for any of their gambling. This is hot topic in some communities where the lottery credit is given. If the tax laws and the state laws do not change to include everyone, then renters will never see a lottery credit. However, renters do have some tax benefits that homeowners are not allowed as well. Maybe it does equal out and maybe it does not, no one as ever tried to figure it out. Some Ways To Help Keep Property Taxes Lower There are a few ways for taxpayers to help keep property taxes lower. The first way is to attend public meeting where decisions are being made about spending limits and spending in general. If you do not participate in meeting that is open to the public for suggestions and opinions, you cannot blame anyone for higher property taxes. If the community spending committee we will call them wants to raise taxes so they can afford to give aldermen and government officials a raise in salary, then no one will be at the meeting to voice their opinion and make people think. If a committee is interested in buying land from a property owner and it is a substantial amount of money that will require an increase in property taxes, you might use a petition to request a vote when the next election is scheduled. This is done in many states and communities. This allows the voters who are tax-paying citizens to vote for or against the proposal. All spending should be done this way. That way everyone in the community has a say or a vote if you may on whether or not this type of spending is necessary. Another way to avoid higher property taxes is to organize fundraisers for things that are needed for schools. If the school district is asking for more money, which could raise property taxes, you might suggest ways for the entire school system to raise the money needed and enjoy in a sense of accomplishment. Not only is this a great way for raising money for the cause, but also gives students and teachers a new way to work together and learn values. This has been tried and accomplished in many communities with great success. Those communities have lower property taxes as well. There could be a committee for school fundraisers, fire and police fundraisers, a committee for nursing home fundraisers and even a fundraising committee for the library and historical museums. The community does come together when a fundraiser not only helps the cause but also keeps there property taxes down. People are spending money, are receiving something in return, instead of handing over their money and receiving nothing in return for the most part. This type of community involvement does have its benefits, people enjoy the fundraising event and the community makes some money that is needed for whatever reason. These are just some of the ways that property owners can help to keep property taxes lower. There are many more ways that people can contribute, they just have to think about how much they really want to help the community keep the taxes lower and organize ways to raise money or at least ask for votes on spending and district increases before the committee approves them. When people want to have lower property taxes anything is possible and when the community leaders are behind you, everyone wins. You just need to look for positive ways to lower the property taxes and speak up at public events that are held in the community. Property Taxes And The Non Profit Organization Non-profit organizations do not have to pay property taxes. This is a true statement, but there are stipulations that apply to the rule. The first thing that has to be defined is whether the organization is actually non-profit. Non-profit meaning that they do not have any profits made from monies received. The other qualification is the non-profit organization has to be recognized by the government as a qualifying activity to claim the exemption for property taxes. You need to know the laws of the particular state to know if your organization is tax exempt. The most common non-profit organizations are nursing homes, social service groups, hospitals, museums, cemeteries, churches and schools. Any property used solely for performances for dance or musicals or any literary adventures and buildings that house historical collections are also exempt from paying or owing property taxes. A union hall however is not exempt from property taxes unless they also offer some training inside the building, then they can qualify for tax exempt status. To qualify for exempt status from property taxes, an organization must fill out an application that is submitted to the state taxing committee. Properties that are exempt from property taxes are not allowed to have any monetary profit, if the organization allows a group to use the property for profit, they can and will lose the status of a non-profit property whether is for their gain or someone else's. The guidelines for tax exempt properties are very strict. If the organization sell a property to a new owner that new owner is subject to property taxes. If it is another non-profit group, they need to file an application for tax exempt status. If the property is qualified for tax exempt status, it is not for the current year, it is for the next tax year. One example of a non-tax exempt property is a house used as a church. For example, if a house is used as a church, there can be no other uses allowed. No one will reside in the house as a permanent tenant. This would then change the status of the house and disqualify it from a tax exempt status. The property taxes would be owed according to the county clerks records. Local governments would review the issues with the church, but if it is found to be used as a residence, the status is automatically changed to property owned for profit. Some building that are land marked as historical places may qualify for tax exempt property taxes. There are however strict guidelines for determining the exemption of property taxes. To determine if the property is exempt from property taxes, one must go through a review process, the community's historical society committee usually conducts that review. As you can see there are many steps to take for exemption of property taxes, it not something is given out without a great deal of review and examination. A property owner must present all records pertaining to the non-profit organization to prove no profit is being made. Mobile Homes And Property Taxes In Wisconsin In Wisconsin the assessment of a mobile home only has to be done from the point of view meaning the outside can be used to assess the mobile home, however an inside assessment does help. Mobile homes only have to be assessed every five years, therefore the assessed value and the market value are with in ten percent of each other. Mobile homes in Wisconsin can be assessed for taxes as personal or real property. This also means a mobile home may be subject to no property taxes. If you have a mobile home that is on a foundation, it is considered a real property. If it is on wheels or no foundation, it is considered personal property. It also has to be on land owned by the mobile home owner. Therefore, if you do not own the land and there is no foundation to say, it is personal property and not subject to property taxes. Recreational vehicles and campers are not subject to property taxes as well as personal tax liabilities as well. Just because a mobile home has wheels, does not always make it exempt from property taxes. Property tax laws governing mobile homes are difficult to understand whether you live in Wisconsin or any other state. Many things are considered before you are liable for property taxes. You might think your mobile home should be subject to property taxes, but the taxing authority may consider it a personal tax issue. A mobile home is also measured for the length and width, which helps an assessor determine if it qualifies for property taxes. This will give the square footage of the mobile home, which has to be a minimum of so many square feet to be considered a dwelling with potential property tax liability. If your mobile home is subject to a fee for parking that is common with mobile parks, your mobile home is not charged property taxes. This is because you do not own the property and you are paying rent to park your mobile home in the park. Therefore, you owe no property taxes. You are however required to pay the parking fee that can be a nice size amount of money. This is besides your monthly payment owed to a lender who holds the lien on the mobile home. You will however have to claim the mobile home as a personal tax. Property taxes in Wisconsin for mobile homes are as follows, mobile homes subject to property taxes are any size on a foundation with utilities hooked up on land that is owned by the mobile home owner, but they are subject to personal tax but only if there is no parking fee paid. Exempt from property taxes are recreational mobile homes and campers as well as vans and buses. Units that are on wheels and transported to a site for assembly of sections are subject to property taxes, this would be a twin section unit. Mobile homes for sale on a dealer's lot are not subject to property taxes in Wisconsin as well. Make Sure To Pay Your Property Tax On Time When you buy a house or property, the mortgage company that holds your mortgage usually has an escrow account set up, which holds your monthly payment towards your homeowners insurance and property tax. The standard procedure is for the mortgage lender to send you the money in a form of a check in December to pay your property tax. If you do not receive this check by the end of December, you should consult with your mortgage lender. The idea of paying your property taxes before the end of the year, means you can claim it on your current years tax return that you will file in January or February. People expect to pay their property tax before the end of the year so they can take the tax as a deduction on their taxes. If you do not receive the payment before the end of the year, you will have to wait until the next filing season to claim your property tax, which means this year's property tax deduction is not available and therefore, you have one less deduction. This means a lot to people that rely on deductions to reduce their total tax liability. You can still claim your mortgage interest, but not the property tax. Some people do not have an escrow account set up by the mortgage lender for one reason or another. If you happen to be one who does not, you have to save the money yourself. This is sometimes very hard for people to do, especially if you are on a tight budget. You could wait until you receive a refund for your yearly tax returns, but you might miss the first installment date, which in most states is January 31. The second installment is then needed by the end of July. If you miss the first installment, you are not able to participate in the installment plan. You can still do it this way, but you will be charged a penalty and interest on the outstanding balance. Many people have found that the interest rate can accumulate quite rapidly if you do not have the funds available when needed. This can cause a strain with the county and the homeowner. The county wants their money. If you leave your property tax liability go to long, you might find yourself in quite a predicament. The county can and will come after your house for the money. It is always better to have some form of escrow account set up by your mortgage lender or by you, therefore, the money will always be available to pay the taxes. If you fall behind, it is very important to get caught up as soon as possible in order to prevent a lien being put against your property and risk an auction of said property to recoup the delinquent property taxes. Property taxes owed on a property never go away unless they are paid. Property owners need to plan ahead, especially if the mortgage lender does not provide an escrow account to save the money for you. Is Your Property Tax Assessment Outrageous When you receive your property tax bill, you need to go over it very closely. You need to look at the fair market value and the assessed value. These two different things have two different meaning when figuring your property tax liability. Many people have complaints about how the assessment of homes or properties is done. The county assessor does not enter your home or property, they look at the outside for a description of the property to compare to other similar properties in the area to determine your assessed value. This is common practice and may not always be the true assessed value of your property. Now this assessed value does not take into consideration bad roofs, cracking interior walls, bad foundations, windows that are falling apart or anything else wrong with the house. They also do not see if you have done any repairs or behind the scenes remodeling so to say. All the assessor sees is the outside of the property. If you know your assessed value is outrageous because of deteriorating conditions, you can appeal the property tax assessed value. You would do this to have the assessed value of the home lowered, thus reducing your overall tax liability. If your home is assessed at $100,000 and you need a new roof, which includes trusses and some structural preservation that is going to cost $50,000, then you might think the assessed value of your property is over exaggerated. If this has happened to you, you can seek a property tax lawyer or a consultant to give you some advice on the appeals process. You do not want to pay taxes on a property that is half of the assessed value than what it should be at this specific time. If you wait until the next year, it may be to late to have anything done. You need to take some steps to protect yourself when filing an appeal of property taxes, which a lawyer can point out to you. If you property is in that much need of repair, the city may deem it necessary to condemn the property until repairs are made. This is all a part of the system. If your repairs are not life threatening, but more so they lower the value of the property, then a property tax lawyer can argue this point for you. You can see how important it is to check your property tax bill to see exactly what is said about your property. Many people just get the bill and pay it without really giving it any thought. If you go to sell the property and find out that the assessed value is to high and you are selling for less than that, you will find out, you have been paying taxes that are exaggerated. At this time, you have no recourse to recoup any of that money. It is better to check the bill and decide if you feel comfortable about the new assessed value of your property. Is There Relief From High Property Taxes The answer is more likely no. As long as the cost of living continues to rise, property taxes will continue to rise as well. Even with the housing market right now, the economy is still on the rise. Schools still need money, communities need money and other districts need money as well. If no one would need money, like back in the cowboy and Indian days, then no one would have to pay taxes. Since this will never happen, property taxes are going to continue. Schools and school district are the major holder of the capital funds that are brought in by property taxes. The only way to reduce property taxes and find some relief is to find better ways for schools to utilize smaller amounts of money. One example of poor spending happened in one local community, where the school board approved buying some type of removable flooring for a certain school without considering the time and labor needed to place it and remove between group activities. As a result, the expensive flooring is not used and was offered to another school in the community. This resulted in taxpayer's money being spent foolishly and is now not available for other needs. This is just one example of wasted tax dollars being spent. If there was a way to give relief from high property taxes, one would have been found by now. That fact that salaries are rising and more school districts are more about new technology than the old way of learning has called for an increase in higher taxes. One way to cut expenses would be to teach students the way baby boomers were taught, with textbooks and teachers. Libraries today could become obsolete if students continue to use computers for all their schoolwork. Relief from high property taxes requires rethinking the way things are done today verses how things were done years ago. This goes for schools, fire and police, city governments and overall city beautification. There should be more volunteer work for beautification rather than spending thousands of dollars to replace flowers on the medians or buy new garbage cans for the downtown area because you found out the ones you bought are not user friendly. Putting in new streets and then deciding you need to have new sewers a year later is mismanagement of tax dollars. If someone would appoint a committee to oversee some of the horrible spending practices of local communities, relief from high property taxes would be a little closer to a reality. No one wants to pay high property taxes, but when a referendum is up for vote for new artwork in a circle of a street and the majority thinks it is a great idea, everyone loses more tax dollars. Maybe the piece could have donated like the previous years artwork was. Of course, these are only some issues for higher property taxes, but without any say in the matter, many people are going to keep paying high property taxes. Different Circumstances For Property Tax Reduction There are some reasons why people receive a property tax reduction. Veterans, seniors, and low income homeowners can apply for a tax reduction or a tax deferral. Keep in mind that not everyone who applies receives the reduction or deferral. The state and community you reside in may vary from other states and communities. If you do not qualify, you can ask for installment payments on your property taxes. This is one way to avoid foreclosure and possible auction of your property. For low income homeowners owners, the county treasure's office or an online source can supply you with a hardship application. You need to have proof of ownership, income documents, identification and proof of residency. You can also receive information on challenging your property tax increase, obtaining more time to pay, how to obtain relief from property taxes in the future and find information from company's that offer low income financial assistance. If you need to apply for a hardship exemption in your state, you must find out the specifics that are required to obtain an exemption. Hardship exemptions are not given to everyone and some states may not offer this service. The hardship exemption may qualify you for a partial exemption or total tax exemption. Your local community however determines this. The property tax for a veteran who owns a property that is their residence can receive a discount, but they do have to meet certain guidelines. The veteran must have received an honorable discharge. The veteran must have some particle disability and be at least sixty-five or older. Residency requirements might also apply depending on your state. You can apply with your county's tax registrar to find out if you qualify. Keep in mind that ever community has different guidelines that may be more laxed or stricter for reductions and discounts. Seniors can apply for a tax deferral specified by the community that they reside in at the time. This tax deferral program gives you more time to pay your property taxes. You do need to meet certain income guidelines and age requirements. Seniors who wish to utilize this tax deferral must talk with the taxing committee and fill out the application. There are also exemptions for property taxes allowed to permanently disabled homeowners. The guidelines for this situation do vary between states, and you need to check with the county clerk for the guidelines and application process. To summarize deferrals and reductions in property taxes, one would say that low income homeowners can receive a tax reduction, but you do have to meet with special circumstances. Veterans can receive a reduction of taxes, but they may only receive a percentage that meets with the guidelines of the qualifications. Not everyone is going to receive a deferral or a reduction just because he or she falls into one of these categories. It is all up to the taxing committees whether you are accepted or denied. All you can do is apply and wait for a decision by the community committee.
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