How To Lower Your Property Taxes – Adventures In Assessor Land
FACT: The goal of local governments is to get every single penny in tax revenue from you! When I got my property tax bill in 2009, I was astonished to see that the City is taxing my primary residence based off an assessed value 7% HIGHER than in Armageddon 2008! In the biggest economic downturn ever, the San Francisco assessors office believes my property actually increased?! What a sham!
Like clock work, assessed values increase 2-3% higher every year, regardless of the economic environment. It’s as if the City is punishing me for succeeding to lower my assessed value last year by 3%. Too bad for the city, because they are messing with the WRONG person. The tax collectors office counts on citizens to roll over and listen to their every whim, but not me, and certainly not you!
I want to share some tips on how you too can fight against the machine.
5 STEPS TO REDUCE YOUR PROPERTY TAX:
1) Google “<Your City’s Name> assessor’s office.” San Francisco’s site is here. It’s important you proactively find out what the city/county is assessing your property first before you get your bill. You need as much time to prepare for battle.
2) Go to their contact page and call and e-mail them every single day until you get a response. I’m not kidding here. They are sloooooow. Make sure all your v-mails and e-mails are polite, but stern saying you disagree with your assessment with proof.
3) After they respond, you must specifically ask how they came up with their ridiculous assessment value. Ask them to provide comps. Also, ask them what you need to do to make your case. There will undoubtedly be appeal forms to fill out. Fill them out and make copies for yourself (important as they like to tell people they never got it 2 months later, hoping you’ll give up and be too late!)
4) Like any good negotiator, you must highlight the lowest comps and negotiate accordingly. Let’s say your house is worth $1 million bucks. Go in with horrific comparables that look like bomb shelters in terrible locations, such as a house next to a firehouse that may be worth $500,000. Your comparables need to be similar in dimensions and as close to your home as possible. Set your anchor low. The more comps you can provide, the better. The assessor doesn’t usually have time to verify the comps physically, and just uses online comparisons.
5) After sending in the appeal forms and providing comps to your assessor, make sure you courteously follow up every month until you get confirmation of receipt. After reaching out this February, I failed to follow up with more comps until July (big mistake). By then, the assessor had moved to valuing a different district, and another person was recommended to me. Good thing the new person had the forms, and decided to e-mail and call me back. Otherwise, I would have wasted a lot of time. Therefore, don’t forget to back up all your data!
*** This is exactly what lawyers do if you’ve ever got those “lower your property tax” letters in the mail. Don’t be lazy and just do it yourself.
KEEP ON FIGHTING UNTIL THE END FOR YOUR MONEY
Persistence pays off. These guys don’t have to do anything for you so it’s important you approach them in a polite, but stern manner. The new assessor could have said it’s too late since I got my bill already, but he worked with me given my unwavering commitment to fight. After several months of going back and forth, they lowered my assessed value back down to last year’s value, thereby saving me $1,504 ($94,000 X 1.16%).
Use this downturn to your advantage and fight like hell to lower your property taxes. If you’re not selling anyways, who cares if you convince the city to believe your property is worth 30 cents on the dollar? You should be rejoicing instead! Don’t roll over and accept what the city bills you. Take action now!
Recommendations For Protecting Your Assets And Saving Money
* Make sure you refinance your mortgage. If you haven’t refinanced your mortgage in the past 6-12 months, I strongly suggest you at least check the latest rates online with Quicken Loans, the largest online mortgage retailer. They were founded by Dan Gilbert, also owner of the Cleveland Cavaliers. Because they have the largest online network, they can provide the lowest rates. They also seem more streamlined in the refinancing process than traditional bricks and mortar banks as well. Interest rates are at all time lows and won’t stay this low forever, especially with QE tapering talks. My latest refinance was for a 5/1 jumbo ARM at 2.625% from 3.125%. Rates are ticking up due to an ending of quantitative easing as of 4Q2013. Might as well check because it’s free and there’s no obligation.
* Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance! The average credit score for rejected mortgage borrowers has risen to 729 due to more stringent lending requirements. Do you know what your score is? If you don’t want the credit monitoring service, simply cancel before the grace period is up.
* Get the best home insurance possible. In order for your property to grow in value you must protect your property from damage. Fires, floods, leaks, theft, and other accidents happen all the time. If you have cut-rate insurance, you could very well pay way more than you should. I highly recommend checking with USInsurance.com online to find the best home insurance rates. They have a huge network of providers that will compete against each other to provide the most tailored home insurance coverage possible that is affordable. Mobile home insurance, renters insurance, condo insurance, and homeowners insurance are just a few of the options based on the type of home in which you reside. Leverage the internet to save money and protect your largest asset.
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”