Print Edition: March 8, 2015
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Yes, Catholic, there are some ways to ethically reduce your property tax bill. By Phil Lenahan.
BY PHIL LENAHAN
bought a home a year ago, when prices were at their peak. Because of the high
prices in our state, California,
our property-tax expense takes a big chunk out of the family budget. Is there
anything we can do to get these taxes lowered?
While each state is different when it comes to
property taxes — some have none at all — and specific suggestions would vary
state by state, there are steps you can take to reduce your tax burden. Many
people have experienced substantial increases in property taxes over the last
few years with the rapid run-up in real-estate prices. Now that there is a
softening in the housing market, it’s a good time to see if you can save more
than a little money.
Since I live in California as well, I’m a little more
familiar with the scenario in this state, so we’ll use it as a case study.
Property taxes in California
are originally based on the price paid at the time of purchase. This becomes
the “assessed value.” Each year, your county has the right to re-assess your
home based on changing market conditions — but, thanks to Proposition 13, any
increase is limited to 2%. That helps long-term homeowners. Meanwhile, those
who made their purchase more recently are feeling the pain.
In most counties in California, property taxes are charged at a
rate between 1% and 2% of the assessed value of the home. So, for every
$100,000 in assessed value, you’ll pay between $1,000 and $2,000 in property
taxes. With the average price of a
home in many cities in California
being more than $400,000, you can see your property-tax bill adds up very
Several years ago, I had success at reducing our
property taxes by challenging the assessed value of our home.
When the county re-assesses property based on market
conditions, they are doing so at a fairly generic level. They aren’t getting a
specific appraisal for each property but rather applying a general formula
based on overall market conditions.
Now is a good time to look for savings on two fronts.
First, with the run-up in prices over the last several years, it’s possible
your home has been over-assessed. If you can show that your home’s value has
not increased at the same rate as the county average, you have a good chance of
achieving a reduction in the assessed value.
Second, now that prices are on the decline, you’ll
want to make sure your county is making the appropriate adjustment. Check out
Zillow.com to get one estimate of your home’s current market value and compare
it to your assessed amount. If it’s less, you may want to petition your
assessor for an adjustment that will save you some money.
Because this leads to a loss in revenue for the
county, many will be much slower to send out announcements reducing assessments
than they will when it comes to raising the valuations. It’s up to you to keep
an eye on it to make sure they’re being objective.
If your house has truly gone up in value and you
can’t reasonably argue for a reduction, make a prayer of thanksgiving to God
for the fact that he has blessed you with a home of greater value. God love
Phil Lenahan is presdent
of Veritas Financial
Ministries (VeritasFinancial Ministries.com).
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