Property Tax Assessment From A to Z

Reducing Property Taxes Property Tax Assessment From A to Z

The Full Story on a Property Tax Assessment

We have all been there—just when you thought all the bills were paid and everything was up to date, a bill labeled Property Tax arrives out of nowhere, and your finances take a huge hit. Here is what you need to know about a property tax assessment and what you can do about it.

What Is a Property Tax Assessment?

A property tax assessment looks at your property and tries to put a fair value on it so that your local authorities can tax you accordingly. The types of property that are subject to property tax include:

  • Homes
  • Farms
  • Business premises
  • Non-removable building fixtures

The revenue your local administration receives from property tax is important, generally being used to fund public amenities such as local police, fire services, street lighting, or civic cleaning and maintenance.


How Does Property Tax Assessment Work?

Each state appoints several assessors who carry out regular appraisals of property values and record the results.

The assessment aims to determine a fair market value for each property and generally uses one of these methods:

Approach Explanation

Sales comparison approach

The property is compared to other similar-sized properties in the area that have sold recently, indicating how much the property would fetch if it were to be sold

Cost approach

The assessor estimates how much it would cost to build a property at today’s rates

Income approach

For commercial properties, the rental income a property generates is used to calculate its value

There are other factors that influence your assessed property value, such as:

  • Access to public services (sewer, water, electricity, and similar)
  • Development potential
  • Recent renovation or improvements carried out

Once the assessor has determined a fair value for the property, the value is multiplied by the state or local tax rate to arrive at your tax bill. This rate is called the Mill Rate and varies from state to state. In some of them, the tax rate is lower than in others.

How Can I Lower My Property Tax Assessment?

Property tax assessments take into account the current value of your property, so any recent improvements you have made will be reflected in the next assessment.

You should check your tax bill for any inaccuracies and be present when your property assessment is made.

The most successful ways of reducing your property tax bill are these two:

  1. Looking for property tax exemptions
  2. Appealing your tax assessment

Looking for Property Tax Exemptions

If you fall into certain categories, you may be eligible for property tax credits or even a full exemption. We will look at the applicable categories below.

Appealing Your Tax Assessment

As a last resort, you can appeal your property tax assessment. This process varies from state to state, but the principles remain the same. The appeals process is explained below.

What Are the Typical Property Tax Exemptions?

Most states use similar exemption criteria to qualify for a tax credit or exemption that can reduce your tax bill:

  1. Senior tax credit
  2. Income-based tax credit
  3. Homestead tax credit
  4. Renters’ tax credit
  5. Veterans’ tax exemption

Senior Tax Credit

Homeowners over 65 who use the property as their main residence may qualify for a senior citizens’ credit on their property tax

Income-Based Tax Credit

Property tax is not designed to overburden taxpayers, so credits are widely available if your tax bill exceeds a certain proportion of your income.

Homestead Tax Credit

If your latest assessment represents a significant increase compared to the previous one, you may be eligible for homestead tax credit. This limits the amount your tax bill can increase each year to 10% or less, meaning that your new assessment is phased in over time rather than being applied in one go.

Renters’ Tax Credit

If you rent a property, many states consider that you are already de facto paying property tax through your monthly rental payments. In this case, you may be able to apply for renters’ tax credit and reduce your property tax liability.

Veterans’ Tax Exemption

In many states, veterans with 100% disability and some veterans’ spouses may qualify for full veterans’ property tax exemption.

DoNotPay Helps You Reduce Your Property Tax Bill

Property tax may seem confusing and arbitrary, but DoNotPay can help you. Follow DoNotPay’s guidance, and we can help you solve your property assessment problems and reduce your tax bill.

Our app has a powerful property tax tool that gives you a customized recommendation on what you can do to reduce your property tax bill. The guide comes with two sections:

Property Tax Exemptions Property Assessment Appeals
  • Information about your local property tax exemptions that may apply to you
  • A list of documents you must fill in and submit
  • Instructions for the submission process
  • How to deal with a property assessor
  • How to appeal against an assessment

How Do I Get DoNotPay’s Property Tax Guide?

Our guide is simple to get—all you need to do is simply follow these three steps:

  1. Go to DoNotPay in any web browser, sign up, and find the Property Tax feature
  2. Answer the questions about yourself and your property
  3. Wait for the app to give you a customized guide to property tax reductions

Can I Appeal Property Assessments?

All states have an assessment appeals process, but it should only be used as a last resort.

An appeal against your property assessment can be a daunting process, and you may be tempted to avoid it altogether.

DoNotPay can help! With our dedicated service for lodging a property tax assessment appeal, you will find all the information you need for your area to get your property tax assessment reduced.

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