In recent years, several events have decidedly driven down the value of properties in many markets. Your focus, as a property tax payer, must be in knowing the current value of your property in today’s market. Your property tax must reflect the current property market and be appraised at a similar value in comparison with other comparable properties in the same area.

When you receive a notice of an assessed valuation of your property, and you do not feel it represents its current market value you can, within a specified timeline, dispute the validity of your property tax assessment.

The assessor will not lower the property tax assessment unless you have thoroughly researched the key indicators and are prepared to defend your position that the assessed tax value was based on incorrect assumptions or data.

To challenge your property tax assessment you must:

● Insure that the assessment report correctly lists the square footage of your home and the size of you lot.

● Compare the appraised value of similar properties in your neighborhood to the appraised value of your property

● Obtain the selling price (market value comparisons) on at least three to five homes that recently sold in your neighborhood.

After you have obtained and verified the above information and have determined the tax assessment of your property is incorrect, then prepare this information and submit your petition to challenge the assessment.

The assessor’s office will then review your submitted petition and usually provide a written decision to you within a few weeks. If you still disagree with the assessor’s decision, you can continue to appeal, even into the judicial court system.

Owning a home can give you considerable tax advantages. Homeowners pay local property taxes and interest on their mortgage. A renter pays rent. The landlord however can use the money the renter pays to pay the interest on the mortgage so in a indirect way the renter pays this. The homeowner or landlord has a distinct advantage over the person that pays rent. If the landlords income, exemptions, and other deductions are the same as his renter the landlord will pay less taxes so you can see there is a distinct advantage to being a homeowner or in owning rental property.

The homeowner will be allowed to deduct from his income when paying interest on a mortgage or paying property taxes. While rent of course can not ever be deducted. Let me give you an example of how this works. You can have two childless couples whose income and circumstances are identical except one couple rents a house and the other couple owns their house. And while both couples have identical incomes, and deductions the one that owns their house will have further deductions available to them in the amount of $1.920 due to their interest payments and property tax payment. The couple that is buying their home will get to take a total deduction of $2.640 while the couple renting can only take a deduction of $1.500. Believe it or not but the couple who own their home will pay $217.00 less than the couple who rents. As a homeowner you can pass part of your property tax and interest payments on to good old Uncle Sam.

And even when the homeowner pays off their mortgage and even if they live in a community with no property tax they will still receive favorable tax treatment because of the imputed rent income which is paid but they pay no taxes on. Again let me show you an example. Lets say you have two people that both work on the same assembly line for the ABC Assembly Company each making a $30.000 a year income. Now both of these people own their own home but Mr Crane lives in his home while Mr Black rents his home and lives with his relatives. Now both of them have a $50.000 house free and clear. Mr Black has a net cash rental income of $1000.00 after all expenses including his property taxes. He will have to pay taxes on $51.000. Mr Crane should look on his cost free living as being worth $1000.00 which is really income in kind. If these two were to be treated equally they should both pay taxes on either $50.000 or $51.000. But in truth Mr Crane pays on $51.000 and Mr Black on $50.000. The same thing would apply if Mr Crane were to invest his savings in his house while Mr Black invested in high grade municipal bonds. After a time Mr Black would have interest income which is taxable while Mr Cranes rent income received in kind would not be.

Some people can depreciate part of their houses value for tax purposes. If a homeowner uses part of their home for a home business then they can deduct the portion of the over all costs used for that portion of the house where the business is located. For example if one half of the house is used for business then one half of the total expenses can be deducted. The same would be true if the homeowner were to rent one half of their house to someone.

In life their are only two things that are certain and that is death and taxes. The one thing that is never certain is how much taxes you will pay. And unfortunately when it comes to Federal Income taxes the bite can be substantial. And if your in the top income tax bracket you can be hit for a shopping 35 percent of your taxable income. And in order to pay less taxes you must take full advantage of all available tax deductions.

And you will find out quickly that while various books , web sites and infomercials claim other wise that their are very few income tax deductions available to the average tax payer unless you own a farm , operate a business , or have a substantial trust or investment income. You will also find that while some things are technically tax deductible that you must meet a certain level or percentage before the deduction is available to you. One example of this is that while medical expenses are tax deductible it is really only true if your medical and doctor bills exceed 9 percent of your income.

However if you happen to own real estate there are several substantial tax deductions available to you. The U.S, government continues to encourage home ownership and the purchase of homes this way. Are you aware that the interest on a mortgage is tax deductible. And you should know that on new mortgages that any points paid on the loan are also deductible for you.

One key deduction that a lot of people miss is the property tax deduction. People seeking professional tax advise at the paid tax services and public accountants seek to deduct money paid for taxes. And this desire is easy to understand. Because it really seems unfair to pay taxes on money that is used to pay taxes. And fortunately when it comes to property taxes you will find that the tax code agrees.

You don’t want to be one of the many U.S. tax payers that forget about deducting property taxes paid on their income tax returns. Many people tend to forget that they paid the property taxes so they never ask the person preparing their return for the deduction. People also forget because in the case of mortgages the mortgage company is quite often responsible for paying property taxes for you during the term of the loan. The mortgage company is using your money to pay the property taxes with so the deduction is yours.

You need to use a IRS Form Schedule A to claim your deduction for property tax deductions and you will want to fill in the right amount on line 5 which is for real estate taxes. You want to be sure to keep careful records and receipts so you will know the amount you paid for property taxes so you can claim the correct amount. You can claim property taxes paid to your city , county and state so be sure to add up the amounts and claim it all. Keep in mind that if your mortgage company paid your property taxes as part of your mortgage you should receive a form 1099 – INT from the mortgage company and the amount paid for property taxes should be found on that form.

Simply put, property taxes are government taxes assessed by local authorities on your home and the land that it sits upon. These taxes may sometimes be known as real estate taxes. Cities, counties and states can levy them. Normally it is only the counties that do this, but all three are possible.

Establishing a mileage rate generally derives the tax, which is then applied to the perceived value of the land and the home. The tax money is frequently used by the collecting entity as a method of providing services to the property owner in the way of police, fire, school and other services.

Paying property taxes is normally done in two ways. The first would be to include them into your monthly payment to the mortgage company handling the loan. The mortgage company would then pay the tax bill to the collection entity when it becomes due. Normally that is a once a year proposition. The second method would be for you to pay them directly. Many land/homeowners who have paid off their property pay this way.

Another important consideration is that if your local assessor overvalues your home, you have the right to protest property tax assessments in most counties.

It is very important that you keep up with your property taxes as they can get you in trouble if you do not. These taxes are not unlike owing the Federal Government taxes of any kind. They do not go away! If you become delinquent in your property taxes, they will simply put a lien against your property. As with all government entities, they will get their due, sooner or later.

The ‘later’ in this situation is when you sell the property. At the time of sale, they simply exercise the lien and it is normally done prior to the mortgage company getting their money. So in a situation where the property may have lost value to a changing market – such as right now – they would not get full value on the property. To alleviate that situation, many mortgage companies when notified of a lien, will pay it off and bill you then and there to get it done.

The good news is that all taxes related to your property are tax deductible. As a rule so is the interest on the loan used to purchase the land/property.