Paying property taxes can be a significant expense for homeowners, and for some, it can be a burden. If you can’t afford to pay your property taxes or want to reduce what you owe, here are some things you can do.
1. Know how property taxes are calculated.
In order to save on property taxes, you should first make sure you understand how property taxes are calculated. Property taxes start with the appraised value of your home. After exemptions are subtracted then you have your assessed (aka taxable value) which is multiplied by the tax rate to determine your taxes.
Each taxing entity (school district, municipality, etc.) has its own tax rate. You may also see tax rate referred to as mill rate. A mill is equal to $1.00 of tax for each $1,000 of property value. Your home’s appraised value is based on factors such as property condition, size, age, and market location. Once appraised, the assessor will subtract any exemptions to determine your assessed value. Tax rate is multiplied by the assessed value in order to calculate your tax bill. Both of these metrics are subject to change each year, so the amount you owe in property taxes can change too.
2. Appeal your assessment.
If you believe that your property has been assessed at an appraised value that is higher than the fair market value, you may be able to appeal your assessment.
First, you’ll need to complete a form notifying your county’s Appraisal Review Board that you intend to protest your home’s assessed value. You’ll then attend a hearing where you and the appraiser will each make your case. If you win your appeal, you’ll receive a reduction on your appraised value, which ultimately lowers your assessed value and property tax bill.
3. Take advantage of tax exemptions.
Many states offer exemptions and credits for certain groups of homeowners, such as people over 65, disabled individuals, and veterans. Exemptions lower the appraised value to determine your assessed (taxable) value of your home. Again, this value is used to calculate what you owe in property taxes.
If you qualify for any of these exemptions, you may be able to reduce your property tax bill.
Exemptions and qualifications vary from state to state, so you’ll need to do your research to see what you qualify for. Texas homeowners can view our resource guide to learn more about property tax exemptions in Texas.
4. Consider a tax payment plan.
If you are struggling to pay your property taxes in one lump sum, you may be able to set up a payment plan with your local tax assessor. This way, you can pay your property taxes in installments.
Some tax assessors offer payment plans for delinquent property taxes. They may also offer split-payment options if you have paid a percentage of your taxes by a certain date.
Similar to exemptions, payment plan options vary from state to state. The time that you have to pay your taxes back also differs between states. In Texas, you may have up to 36 months to pay back your delinquent property taxes.
5. Look into state and local property tax relief programs.
Many states and localities offer programs to help homeowners who are struggling to pay their property taxes. For example, Texas has the Texas Homeowners Assistance Fund Program, which helps homeowners with mortgage payments, property taxes, and other housing-related expenses.
With this program, homeowners can receive up to $65,000, and up to $25,000 can be used to pay past-due property taxes.
Reduce Your Property Tax Bill with Property Tax Protests
At North Texas Property Tax Services, we understand that property taxes are a financial burden for many homeowners. We encourage Texas homeowners to file a property tax protest to ensure their property taxes are fair. An appeal can lower your assessed value, and ultimately reduce what you are required to pay in taxes.
For more information on reducing property taxes, contact our consultants.