The Upside of Falling Home Prices

The Upside of Falling Home Prices

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A general survey of the national housing market shows that foreclosures are up, home values are way down and sellers are taking a beating as listing prices plunge. We haven’t seen it this bad in at least a generation, with some areas of the country experiencing their worst downturn in memory.

That trusty adage, “Every cloud has a silver lining” still holds true in today’s housing market. For instance, if you’re a buyer you can save big time on your home purchase and if you’re a first time home buyer you can get an $8000 credit from the federal government. What’s more, mortgage rates are down with some borrowers receiving a fixed-rate thirty year mortgage for about 5% thanks to their excellent credit rating.

Cloudy Days, But A Silver Lining

Home values are down sharply in some areas of the country, but property taxes arent. When your next tax bill arrives, perhaps youll consider waging an appeal?

Home values are down sharply in some areas of the country, but property taxes aren't. When your next tax bill arrives, perhaps you'll consider waging an appeal?

But the silver lining extends to homeowners too, especially those with no plans to sell. Sure, some people have seen the gains they’ve realized over the past decade wiped out but they also may see another “gain” reversed if they do their homework. Specifically, with their property taxes. Yes, if you’ve watched your property taxes skyrocket as home values surged, you may be able to appeal your taxes and get them reduced to a more sensible level.

Last week The Wall Street Journal pointed this out in, “Using the Rout in Housing to Lower Taxes,” that homeowners are successfully contesting their tax bills as current housing valuations kick in. People in high property tax states such as New Jersey are realizing significant savings, shaving $100-150 or more per month off of their tax bills. In some states homeowners pay more than one thousand dollars monthly in property taxes, thus whatever savings they can realize will aid their case.

Appealing Your Property Taxes

Appealing your property taxes isn’t an easy process, but it can be done by the homeowner who researches the matter thoroughly and builds a case for reducing their taxes. If one or more comparable homes in your area sold recently, you’ll want to find out what buyers paid for them, information which is of public record usually through your county’s tax office. For example, this means that if the town says that your home is worth $390,000 and one or more similar homes recently sold for $325,000, then your home should be assessed closer to that lower rate.

Some homeowners, fearing that they won’t be able to make a convincing case before the appeals board, hire a tax attorney or other trained professional to go to bat for them. Fees can be steep, amounting to half of the first year’s tax savings, but could yield significant tax savings over time. For example, if you can reduce your taxes by $1200, you’ll owe your attorney $600 for his work. But, over the next five years you could save as much as $6000 in property taxes which means that your attorney’s fee is comparably small to the savings realized.

Online Help Is Available

As the WSJ article pointed out, there are a number of online automated property-valuation models to help consumers determine whether they may be able to reduce their property taxes or not. Initial evaluations are often free, with most charging a fee of $50-100 if their services are used. Lowermyassest.com and easytaxfix.com are two of the sites mentioned by the newspaper.

Once you receive your tax bill, you have a limited amount of time in which to act. The WSJ says that homeowners should check their bills for errors first, then be prepared to make a compelling case in order to win their appeal. Although homeowners have taken their lumps in recent years, a successful property tax appeal could change things for the better.

Adv. – Your property taxes aren’t the only bills you’ll want to reduce in the months ahead.  Let SayLowerBills.com help you find ways to reduce your medical expenses, housing and debt obligations. Take control of your finances in 2009!

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Categories: Property Taxes