Feb 25 2009
Property taxes revisited
Now that I have more time to blog about this, let's discuss property taxes. I'm in agreement with any helpful cost-saving ideas, but this one is not as good as it sounds for all.
About two weeks ago I'm chatting with my plumber who told me about a letter he got in the mail informing him that he was paying too much for property taxes and for a small fee (~ $179) this company would re-assess the current value of his home and get the property taxes reduced to current value. All the while, I'm going through my stack of mail and lo and behold—MY copy of said letter. We got a good laugh out of it.
Then last week my father asked me if I know anything about sales in his neighborhood and reassessing value for property taxes. I told him the letter was a scam and not to get excited about it. He looked at me like, "How did you know I got a letter?"
So here's the deal. Yes, if you purchased a home three years ago for $750,000 and your next door neighbor just sold the same cookie-cutter house for $500,000, it's likely you can obtain a reduction in your property taxes. Property taxes were assessed at the time of last transfer and there is no incentive for the county to suddenly give you a 30% off sale as it reduces their revenue. You can request a re-assessment based on the decline in value illustrated by the sale of the house next door. (Emphasis on YOU.)
However–there is always a However–if you, like my parents, purchased their home 10+ years ago for $300,000, it's unlikely that the house is worth less than the purchase price. Despite market fluctuations, houses will hold and increase in value over time. Don't get caught up in a whirlwind expecting to save money on property taxes just because it sounds good. If you paid $300,000 for the house but the county deems it now worth $600,000, you've just opened a can of worms.
