Property tax has been around ever since states were made and has become a source of revenue for most states in the United States. Schools, local governments, and other parts of the state earn from taxes and use it to provide proper public services. Before a final computation for a homeowner’s property tax is given, an appraisal district will first appraise the value of the homeowner’s property. Each county has its own district, and they are responsible for setting the value of a property every year.
What an appraisal means
Having your property appraised means that you can see how its value has either increased or decreased over time. The downside of a yearly appraisal is that if your property’s value has increased, you end up paying higher taxes every year. It’s estimated that home prices have risen to more than 50 percent in the last five years, meaning homeowners pay higher property taxes on top of their regular yearly costs.
What this means now is that more and more people are buying homes because of its value. These high price appreciation rates are being experienced by majority of homeowners around the country. The challenging part about this is that it’s not just new property owners who are experiencing these price hikes, it’s also their neighbors who have lived in their homes for more than two decades.
What it means moving forward
The question now on people’s minds is if the appraisal district is accurate in the appraisal of their homes or if they’re simply being charged more than what their property is actually worth. Many homeowners are saying that their property tax is not proportioned to the appraisal they got, with one person even saying that his property tax is worth more than the payment he made for his home which he bought in the 80’s. It had started to affect enough people around the country that they’ve started wondering when this all started happening.
Because of this, many homeowners are creating their own strategies on how they can lessen the burden of paying high property tax. Some have decided to turn their homes into their office so they can avail of the home office deduction. Others have decided to rent out their properties in hopes of becoming a pass-through entity to avail of the 20 percent deduction for qualified businesses – it’s something that relies on chance and if it doesn’t happen, renting out may not lessen the tax, but it can help lessen the load with the rental income.
Now, there’s a high probability that tax refunds will be delayed after the government shutdown. This means that homeowners who are already experiencing high property tax rates will have to wait before they can redeem their tax refunds. While this may be a hurdle, it’s best for homeowners to stay in touch with their local tax assessors and appraisal districts to fully get to the bottom of their rising property taxes.
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