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Reducing Property Tax Debt

Challenging the Assessment. Your property taxes are based on the assessed value of your property, and you can reduce your property tax by successfully challenging your home’s assessment. You can challenge that the assessed value is too high. More commonly, homeowners claim that their home is assessed for more than comparably valued homes in the neighborhood. How much other homes are assessed for and what their characteristics are is a matter of public record, and you may even be able to see this information online. Otherwise, your local assessor’s office will have the assessment information.

You do not need to hire an expert to value your home or that of other similar homes in your community, although that can certainly help. You can testify yourself and you can also represent yourself without a lawyer. You initially challenge an assessment not in a court, but before a local tax board, agency, or company hired by the tax assessor that will have looser procedures and requirements than a court. If you lose your challenge, you typically have the right to go to court to appeal the ruling.

Often you only have a short period of time after a new assessment or a tax bill to challenge the assessment. Be sure to meet all deadlines. Some states require you also to make full payment on the tax bill or at least the amount you are not contesting while the assessment is being challenged. Although it may seem that you are not gaining anything if first you have to pay the full amount before challenging that amount, this is not the case. If you win, not only will you receive a refund of the excess amount you paid, but your tax bills will be smaller for years into the future.

Abatement, Exemption, and Deferral Programs. Every state has a program to lower or delay property taxes for at least some homeowners, often called abatement, exemption, or deferral programs. Typically, you will not be offered these programs; instead you must ask for them. A surprising number of homeowners are eligible for these programs, but never request them. It definitely pays to check if you qualify.

Each state’s program is different. Some states provide relief for disability, low income, or personal status (such as veteran, disabled veteran, firefighter, or police officer). Every state has some kind of relief for older homeowners. Often if the spouse qualifying for relief passes away, the other spouse can continue receiving the relief. If you do not qualify for any of the categories of relief available in your state, some states let tax assessors grant hardship exemptions for age, infirmity, or indigence. In some states general information about the programs can be found on property tax bills.

To request relief, submit an application with proof of eligibility. Often this must be done shortly after you receive a tax bill, or you will have to wait until the next bill to apply. One frustrating thing about seeking this relief is that, while you are legally entitled to it, some assessor’s offices are not familiar with the programs or discourage people from applying.

But your home may be at stake, so be persistent. If necessary, find out on your own about your state’s programs and educate the assessor’s office about them. You may be able to get help with this at your local legal aid office. If need be, go to court to press your rights, after documenting as much as possible what happened at the assessor’s office.

The amount of relief available will depend on the state program and the nature of your application. In some states, the tax amount is reduced to a more affordable level; in other states it is reduced by a fixed percentage. Some states freeze the property’s assessment for older homeowners so that the assessment does not increase after a certain trigger date. Other programs do not permanently reduce your tax bill, but instead defer when you have to pay all or part of the tax to sometime in the future, such as when you sell the house. Some states also let older or indigent homeowners perform community service instead of paying taxes.