As a homeowner, your goal is to keep your operating expenses as low as possible. Property taxes is one of those expenses that never goes away, but can be managed. As someone who has successfully fought the property assessors office multiple times before, let me share how you can lower your property taxes as well.
The Government Always Wants Your Money
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.
How To Reduce Your Property Taxes In 5 Steps
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 real estate 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.
Never Give Up On Fighting To Lower Your Property Taxes
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 any downturn (like a pandemic) to your advantage. 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!
Shop Around For A Mortgage
Check the latest mortgage rates online through Credible. Credible has one of the largest networks of lenders that compete for your business. You can get free, no-obligation quotes in minutes. The more lenders compete for your business, the lower your rate. Mortgage rates continue to be near all-time lows.
Take advantage of the 15-year mortgage in particular. It’s an abnormality that it is average below a 5/1 ARM, which I usually like the best.
Invest In Real Estate Wisely
If you’re looking to buy property as an investment or reinvest your house sale proceeds, take a look at Fundrise, one of the largest real estate crowdfunding platforms today. They allow everyone to invest in mid-market commercial real estate deals across the country that were once only available to institutions or super high net worth individuals.
They are the pioneers of eREIT funds and they are creating an Opportunity Fund to take advantage of tax-efficient Opportunity Zones. Thanks to technology, it’s now much easier to take advantage of lower valuation, higher net rental yield properties across America.