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Eight Ways You Can Lower Your Property Tax Bill

Property tax is a hot button issue that never fails to get people up in arms. Taxes have been on the rise for years; outpacing inflation in most places; and the increased taxes have forced long time residents out of their homes, especially in tourist areas or wealthy areas like beaches or big cities. On South Carolina's Sullivan's Island, families who have lived on the island for generations and who help rebuild the community after the devastation of 1989's Hurricane Hugo are now being forced to give up their homes to developers or wealthy newcomers and head inland, because they can no longer afford to pay the taxes on the family home. The scene is being replayed over and over again across the country. With out of control property taxes now the norm, can you ever get your bill under control? There are eight simple steps you can take to help take the bite out of your tax bill and bring your property taxes in line.

First, you need to know your enemy. Property taxes are a state government issue, and each state has its own way of setting their tax rates. Know who is responsible for the taxes in your state, how they are coming up with the rates, and where the money is going. This information may not sound like such a useful way of reducing your tax bill until you hear the second step in getting your property taxes down; challenge your property assessment! Tax expert estimate that at least 60% of tax payers are paying rates that are based on over assessments of their property's worth.

Fighting your state's tax officials might not sound like a walk in the park, but it's really not a difficult process. Each state has its own appeal process; make a call to city hall, find out what you need to do, and go for it. One caveat about going down this road, though; shady tax advisors have begun offering to fight the state for you in exchange for a commission on your return if your taxes are lowered. Don't do it. It's illegal for them, and trusting the wrong person with your taxes is playing with fire.

Step three is paying your property tax early. If you get your bill in November, pay it before the end of December even if it's not due until June. That way, you can claim it on your federal income taxes as a deduction. Step four is to make improvements to your home to make it more energy efficient. Some states offer tax credits for these improvements, but even if your state doesn't, the federal government does, and you'll at least be able to make some of the money you spent on your property tax back. Step five is, ask around. Are your neighbors paying significantly less than you are? Then they must know about a deduction you don't.

Make sure you claim every penny to which you are entitled. Step six involves making your property a dual usage property. Set up that home office, and then grab yourself a deduction for having an office in your house. Tax saving idea number seven is opening your home up to charity. Allow a charity group to hold a meeting in your home once a month, and deduct your charitable giving from your bill.

Step eight is one of the most important - get active. If property taxes are getting too high, too fast, campaign against them. Get your neighbors involved and demand politicians do something about the growing tax bills. In the long run, this is the best way to keep your property tax bills in line.