I call this time of year “property tax season” because conversations with home owners start to really heat up now that April 15th has passed and most local Assessors will soon publish their 2011 property tax figures. Ever year around this time I get a great deal of calls about reducing property taxes in the Sacramento area. Let me share with you three of the tax situations I encountered last week:
Owner of vacant parcel: I just spoke with an owner of a vacant parcel in Sacramento, and his land is easily overassessed by $250,000. Vacant land is often assessed high for investors who purchased in recent years since land values have plummeted since the cost to build often currently exceeds resale value.
Paying twice as much: In the past two days I spoke with a home owner who is paying more than twice as much in property taxes as he should be. His house is worth less than $200,000, but it is assessed at $400,000. Keep in mind that every $10,000 in assessment equals about $125, so this owner is essentially overpaying by $2,500 per year.
My own property taxes: The Assessor agreed to reduce the assessment on my own property by $27,000 for my 2010 property taxes. They ended up agreeing with my appeal last year, so on Friday I faxed back a “tax withdrawal” form to say I’ll accept the new value. This is not a huge savings, but I don’t mind getting a refund of $330 or so. I’ve been successful at appealing my own taxes for three consecutive years.
How do you know if you should appeal your property taxes? First of all, please do not pay anyone to appeal your property taxes until you know how much your property is assessed for 2011 and also if it really makes sense for your wallet. As an FYI, 2011 assessments will be announced anytime between May through July for most counties surrounding Sacramento. I made the video below last year and I think it may help provide a good context for understanding whether you should appeal or not. You may also wish to read some FAQs on my property tax appeal website. Note my fee is now $99 instead of $89 for a typical house – not vacant land or anything complex. There are so many companies ripping people off too, so I also included a second video, “Two reasons to be careful of those ‘lower your property taxes’ mailers“, to help illustrate what types of companies to avoid. I know a video like this sounds like I’m saying “work with me – not them”, but it’s really not self-serving at all. This is about helping locals understand the tax appeal process so property owners are equipped to make a well-informed decision.
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