Homeowners, particularly those in New York State, have been struggling with exceedingly high property taxes. In the midst of a slow recovery, when home values still remain low, property taxes, seemingly immune to the dismal economic climate are high and even rising in some areas. In fact, according to the National Association of Home Builders, property taxes rose a whopping 20% from 2005-2009 (with '09 being the most recent data available). During that same time period, home values fell 31%. Homeowners are essentially paying more taxes for an item that has been steadily decreasing in value. Why the disparity? and what can you do about it? There are steps a homeowner can take to, at the very least, ensure that they are not over-paying their property taxes. This latest post on the Taft Street Realty blog explores how an old and outdated assessment of a home may be contributing to higher property taxes.
Property Taxes Based on Outdated Home Values
The answer lays in how taxes are calculated and collected by local governments. Municipal governments determine a property's taxes based on the value of the property. The problem is that local governments don't have the means to re-assess every home's value every year. So the government may be calculating taxes based on home values from years ago. It's no secret that home values are dropping, so there's a good chance that your property taxes reflect a time when the market was better and your home was worth more. In fact according to the Congressional Budget Office, property tax adjustments lag behind home price changes by approximately 3 years. As we all know with regards to the value of homes for sale in the Hudson Valley and elsewhere, a LOT can change in 3 years! Perhaps you suspect this may be the case with your property taxes. Odds are you're right, as the National Association of Home Builders calculates that more than 50% of homeowners are overpaying with regards to their property taxes!
Lower Assessed Value = Lower Taxes
What can you do about it? Well, there's no way to actually lower the rate itself, which is determined by the government. You CAN however have the assessed value of your home lowered, which would translate into a lower tax bill. Contact your local Tax Assessor / Collector and ask them your home's current assessed value. If you think it is incorrect, inquire with the Tax Collector on how to re-assess your home's property value. You will most likely have to file an appeal to have the assessment changed, but the time and effort may well be worth it if it results in a lower property tax bill. So if you think you're taxes are too high, see what your local government has on record regarding your home's value. You may find that having a more accurate or up to date assessment of your home can lead to lower property taxes down the line. For the most helpful blog for homeowners in the Hudson Valley, tune into Taft Street Realty!