Reducing Property Taxes Property Tax Discount From Start to Finish

# Keep Your Money in Your Pocket With a Property Tax Discount

Owning a home is an expensive business. Apart from the initial outlay to buy the property, you have to pay for upkeep, repairs, insurance, and maintenance. As if that were not enough, once a year you get a four-figure bill for property tax.

With property tax, you have two choices—You can pay it and hope it doesn’t increase too much after your next assessment, or you could look for a property tax discount.

## What Is Property Tax?

Property tax is a state levy based on the value of your property and is used to fund services that benefit the community. Most states are highly transparent about where your property tax dollars go, with some even inviting public participation in the annual budgeting discussions.

The most common services on which property tax revenue is spent are:

• Education
• Police
• Fire department
• Libraries
• Garbage collection
• Parks and public recreation facilities

Payment models vary from state to state, but most expect settlement of your tax bill in either one or two installments per year.

## How Is Property Tax Calculated?

Property tax is calculated by multiplying the fair market value of your property by the state’s property tax rate, also known as the Mill Rate.

Mill rates vary, but the U.S. median is currently 1.07% of the value of the property. Some states are significantly higher (Maine or Illinois), but there are many states with low property tax rates.

Using typical house prices across the U.S. as a benchmark, this means that the average homeowner pays around \$2,000 a year in property tax.

The biggest variable in this calculation is the fair market value of your property. Each state appoints assessors to determine a value for every property in the state. The assessors are highly trained and use three scientific approaches to setting a price for a property. The methods are:

 Approach Explanation Sales comparison approach Compares each property with similar-sized properties in the area that have sold recently Cost approach Calculates what a property would cost to build new at today’s prices Income approach Uses the income a commercial property generates to calculate a value

## What Are the Typical Property Tax Discounts You Can Apply For?

Most states offer several options for reducing your property tax bill. The most straightforward route to a discount is to look for a property tax exemption for which you are eligible.

The most common property tax exemptions—effectively tax discounts—are as follows:

2. Senior citizens’ property tax exemption
3. Veterans’ property tax exemption
4. Disabled persons’ property tax exemption

As a homeowner, you can claim a reduction in the assessed value of your property, which results in a discounted tax bill.

### Senior Citizens’ Property Tax Exemption

If you are over 65 and living in your property as your primary residence, many states allow a reduction of the property’s assessed value.

### Veterans’ Property Tax Exemption

If you are a certified veteran or you were disabled while serving, many states offer relief off your property’s value.

### Disabled Persons’ Property Tax Exemption

If you are disabled, you can claim a reduction of your property’s assessed value, which will be reflected in your subsequent tax bills.

Most states opt for reductions in the assessed value of your property rather than direct tax discounts, but the result can be significant. Qualifying for exemptions that reduce your property value by 15% would effectively give you a discount of \$300 on your annual property tax bill.

The downside with this method is that you may have to reapply for your exemption after every assessment, which can be every one to three years.

## How Can I Apply for a Property Tax Exemption?

Each state has a unique process and due dates for claiming an exemption to give you a discount on your property tax.

You can either get in touch with your state or local department of revenue or use DoNotPay to help you find the exemptions you qualify for.

Our app checks your location and gives you customized advice on exemptions that are offered in your area. The guide comes with two sections:

 Property Tax Exemptions Property Assessment Appeals Information about the property tax exemptions available in your area A list of documents you must fill in and submit Instructions on how to submit your application How to negotiate with a property assessor How to appeal an assessment you think is wrong

## How Do I Get DoNotPay’s Property Tax Guide?

Getting our guide is simple—here’s what you must do:

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

If you don’t qualify for any exemptions in your state, there are some things you can do to get help with your property tax liability. Here’s what we suggest:

• Avoid carrying out any improvements or renovations to your property
• Verify that your tax bill is completely accurate
• Accompany the state assessor when your property is appraised

As a last resort, you can appeal your property tax assessment. DoNotPay can help you understand the appeal procedure, find out what documents you need, and ascertain where to lodge your appeal.

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