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Everyone has to pay taxes, but no one should pay more than their fair share.
Many homeowners could benefit from appealing their property taxes. In fact, the National Taxpayers Union Foundation reports that 30-60% of taxable property in the united States is over-assessed, which means that roughly the same amount of homeowners are overpaying on their property taxes!
What's worse—only 5% of taxpayers will challenge that assessment. With the help of the Stern Team, disputing your property taxes can be quick, painless, and easier than you may think.
How property taxes work
Homeowners should have a basic understanding of property taxes whether they want to challenge them or not. Property taxes are fees that each landowner pays the local government based on how much their property was valued at. The percentages vary by each county or tax district. According to a recent article by Rocket Mortgage, Utah has the 12th-lowest property taxes in the country, with residents paying an average of $1,367. New Jersey has the unenviable position as the highest, with the tax rate of 2.49% causing residents to shell out more than $5,000 per year!
Within Utah, rates vary from county to county, but are all relatively low compared to other states. The main reason for this is that the state provides a large exemption in the Utah State Constitution.), allowing 45% of your property to be exempt from taxation, according to Utah.gov. (To get the exemption, you must reside at the property at least half the year.) This means you're only paying taxes on 55% of the market value of your property. So if your house was assessed at $100,000, your property tax would only be calculated based on $55,000. Thanks, Utah!
Reasons you could be overpaying
The first step in ensuring you pay the correct property tax amount is to file for any applicable exemptions. If you haven't filed exemptions that you qualify for, you're definitely overpaying. There are various property tax deductions available for seniors, veterans, and those with disabilities. The Utah Property Tax Division details who qualifies and how to file those exemptions here.
The second reason you might be overpaying is if the assessed value of your property is too high. Each tax district completes assessments by January 1 of each year. Homes are valued at the fair market price, or in other words, the amount a buyer and seller would agree on in an open market. Occasionally, this can be too low or too high. In even rarer instances, a property could be assessed twice, and the owner would be on the hook for double the amount if the mistake isn't caught—so read your notice carefully.
Major changes to your property are what affects the assessed value. Swimming pools being added or removed, mature trees being cut down, or even damage from a natural disaster are all reasons that a home's assessment could be incorrect.
Typically, property taxes won't rise if the value of homes are rising at similar, steady rate. Unfortunately, this hasn't been the case with the housing bubble in Utah. Katie McKellar writes in the Deseret News about Utahns experiencing sticker shock with their taxes this year. Tooele County Assessor Jake Parkinson said, "It's unprecedented to see an increase not necessarily because of (proposed tax hikes), but because of your value going up."
How to appeal
Homeowners who want to appeal their property taxes need to remember that it doesn't mean a big dustup with the local tax office. It can be as easy as filing a request to challenge the assessment. If you are a homeowner who was over-assessed, challenging that figure could yield you hundreds of dollars of savings!
The most important part is meeting the deadline to appeal. These vary among each taxing entity, but will usually be in August or September, or a certain number of days from the time you receive your assessment. Contact your local authority for the tax calendar. Once you know your deadlines, it is a matter of filing your dispute however your county requires you do that.
For guidance and tips on the process of disputing your property taxes, the Stern Team has free resources you can access. Click here for a free video by the Stern Team explaining how you can avoid paying more than you should. The Stern Team will even dispute your taxes for free, with no obligation to them.
