If you live in Frederick County Maryland you may have recently received your assessment notice in the mail. In many areas property values are on the rise, but there are ways that you can lower your property taxes for this year. Keep reading!
#1: Appeal Your Property Assessment
Think about this revealing fact: between 30% and 60% of homeowners are paying a higher property tax rate than they should because of a bad property assessment. But only 1 in 10 homeowners will ever contest their assessment.
Research and gather information comparing your property to similar properties in your neighborhood. (A REALTOR® may be able to help you with this.) Once you compare your rate to what others around you are paying, you will have a good idea about whether your assessment maybe wrong.
Be aware, any improvements you have made since your last assessment will cause your property taxes to go up. Also, take a look at your property card by going down to your assessor's office to check for errors. Keep this in mind: up to 40% of homeowners who challenge their assessments win.
#2: Tax Credits & Deductions
An indirect way to reduce your property taxes is to offset them with tax credits and deductions. It is amazing how much money homeowners leave with the IRS at the end of each year simply because they did not claim all of the credits and deductions available to them.
If you make certain improvements to your home that fall into one of these categories, you could offset your property taxes by hundreds if not thousands of dollars. Here a couple of homeowner tax credits and deductions available to you:
- Home Improvement Loan Interest. Any home improvement loan of $100,000 or less is tax deductible.
- Energy-Efficiency Tax Credit. Simple improvements like installing new efficient windows, HVAC, insulation, or storm doors can account for hundreds of dollars in tax credits.
- Renewable Energy Tax Credit. Green improvements like installing solar panels that supply your home with energy gives you a tax credit of 30% of your costs for buying and installing.
- If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and applies to all types of homes.
These tax breaks may change frequently, so consult a professional tax adviser to discuss what is available to you.
#3: Take Advantage of Tax Breaks
Finally, in addition to these measures, standard run-of-the-mill tax breaks can save you a lot of money. You need to research tally up the different credits and deductions afforded to you as a homeowner. Talk to a professional tax adviser about shielding part of your home valuation from taxes. Ask what credits are available to you as a senior or a veteran. Regular mortgage deductions added up to nearly $2,000 in past years.
Every jurisdiction is different, and some cities and states could offer additional tax breaks and property tax reductions that are not listed here. Check with your local county assessor's office or talk to a professional tax adviser about other ways to reduce your property taxes. If you have questions regarding your property value feel free to contact me anytime.