The amounts of money you pay each year in property taxes are used to help fund local schools and governments. While this is very helpful in community development, a slight increase in property taxes could cost you a lot in the long run. It could add thousands of dollars to your annual tax bill. Every year, a homeowner pays around $2,127 in property taxes.

What Is Property Tax?

Property tax is the amount paid every year by the landowner to the government in the area where the land or property is situated. The property could include all tangible real estate properties such as the house, office building, or properties rented to others.

Each year as a property owner you can do certain steps to lower your property taxes. However, the time to take action to lower your property tax bill is not when you receive it through the mail. It should be done long before you even see that envelope in your mailbox from the LA county tax collector or the tax collector from the state and county that you live in.

Some of us like to wait considering that our tax payments will be deducted from our mortgage escrow account, so we usually do not pay close attention to it. There are several ways on how you can reduce your property tax bill. However, none of the discounts available will automatically be applied. So here are five tips on how to reduce or lower your property tax.

How To Lower Your Property Tax

1. Contest Your Assessment

The tax bill has two parts: the actual tax rates applied and the assessed value of the property. Although you could not do anything about the tax rates imposed by the local services like towns, schools, and fire departments, you can always contest the assessed value of your property. In reality, the assessed value of your home is not what it is necessarily worth in the open market.

For that, you have to get the help of a real estate agent or appraiser who conducts market estimates. Local assessors will only look at how much similar homes are selling at the market and usually based their assessments on the most recent sales. This means that they are not accurate all the time and you must look at the figures that they give.

You can question these estimates given by your local assessor by hiring your personal real estate assessor. Check the property description and see if it is accurate. If the record shows your home with two full baths when you only have 1.5 baths, that will certainly lower the value of your home.

2. Check If You Qualify for Discounts

For simply living in your home, most local assessors give homestead exemption. Senior citizens and veterans usually get lower assessments. You can check with your local or county assessor on the possible discounts that apply. If your assessment record does not have them, it is time that you update your assessments.

3. Hire An Independent Appraisal

Getting someone to give the value of your home independently could cost you up front. However, it can save you a lot of money in the long run. The independent appraiser will go to your property, conduct an inspection, and provide a report. The report will contain photos, listings of similar homes in the neighborhood, and measurements. If you see more valuable properties that pay less, you have a good reason to file an appeal.

4. If You Think Your Assessment Is Wrong, File An Appeal

As mentioned above, there could be a lot of argument on what makes up the market value. There are various factors that could affect the market value of your property. It is possible that your property may have some maintenance issues or structural problems. It could also be located just across from a factory.

5. Hire a Lawyer

There are many people who have successfully reduced their property tax bill on their own using these tips. You can also hire an attorney to handle the filing and meeting the deadlines. When you hire one, make sure to get someone who does not charge an upfront fee but charges on the service depending on your tax savings on the first year. Then consider the cost against your possible property tax savings. You should see if the attorney’s fee is worth the cost.