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Property Tax Issues
New Record: San Diego County Collects More Than $1 Billion in Property Taxes in Single Day (San Diego Union Tribune, Apr. 19, 2023)
“McAllister said it isn’t a guarantee that every year will bring in more than the following year and a lot depends on the overall real estate market. There were some years during the Great Recession when taxes were down or flat for the year, but McAllister said the overall trajectory over the last 25 years is that the total keeps growing. The tax collector’s office oversees an investment fund of $17.2 billion in assets, such as CDs, treasuries and bonds”
Property Tax: Calculator & How Property Tax Works (NerdWallet, Feb. 22, 2023)
“Failing to pay your property taxes can result in the taxing authority placing a tax lien on the property. A tax lien is a legal claim against property or financial assets you own or may have coming to you. It’s not a seizure of your assets, but it is a claim on them. If you sell the asset, the government could be entitled to some or all of the proceeds.”
The Best and Worst Property Taxes by State (The Balance, May 31, 2022)
States have a wide variety of property taxes, even differing on limits and caps to how much residents can be taxed. The states with the lowest property taxes are Alabama, West Virginia, Arkansas, South Carolina, Louisiana, Mississippi, Indiana, Tennessee, Kentucky, Wyoming. The states with the highest property taxes are New Jersey, Connecticut, New Hampshire, New York, Illinois, Massachusetts, Vermont, Rhode Island, California and Texas.
2022 Instructions for Schedule A (Form 1040) Itemized Deductions (Internal Revenue Service, 2022)
This form from the United States Internal Revenue Service provides detailed instructions so you can properly deduct your property taxes from your annual taxes. The form is updated annually, this is the form for filing taxes in 2023, which were due April 18th.
Tips for Managing Property Taxes and Finding Tax Rates (HouseLogic)
This helpful guide form HouseLogic explains where to find your local tax rates, how property taxes are calculated, what to consider for your budget, and how federal tax deductions come into play.
Property Taxes Impact on Property Value
Unprecedented Gains in Colorado Home Values Preview Budget-Busting Property Tax Hikes Next Year (The Denver Post, Apr. 26, 2023)
“Gains in property values don’t correlate directly to the gain in property taxes that property owners will receive next January, assessors emphasized. Yet they are a key part of the formula and provide a rough guide to what is coming. And what is coming could be budget-busting for households already stretched by higher food, transportation, utility and property insurance costs.”
How Will Proposed Changes to Philadelphia’s Property Taxes Affect Homeowners (Mansion Global, Apr. 20, 2023)
“Real estate taxes in Philadelphia are calculated at a rate of 1.3998% of the assessed market value of the property, Mr. McCann said. If the bill is approved, homeowners will be able to take advantage of a 1% discount if they pay their next tax bills in full by the last day of February 2024. “Most people in luxury homes will pay their taxes in advance to save that money,” he said. Taxes have risen sharply in the past 10 years, Mr. McCann said. Reassessments carried out in 2022, following a three-year hiatus due to the pandemic, saw residential property values increase by an average of 31% this year. The proposal to reintroduce the discount is part of a wider effort to ease the financial burden of property ownership, which includes an increase in a tax exemption available to primary residents”.
Neighborhood Institutions and Residential Home Sales: Evaluating the Impact of Property Tax Exemptions (Journal of Real Estate Finance & Economics, Feb. 2022)
“By far, the most extensively studied tax-exempt nonprofit property type is religious institutions. Do et al. () found a negative influence of churches on surrounding home prices up to 850 ft away. In a direct rebuttal to Do et al. (), Carroll et al. () found a positive relationship between proximity to a church and home prices; specifically, prices decrease at a decreasing rate as the distance from a church increases.”
Property Tax Rates and House Prices: The Impact of Relatively High and Low Property Tax Rates (Journal of Property Tax Assessment and Administration, 2020) E
“We investigated three property tax issues and summarize our research. First, what is the impact of property taxes on home values, given that the literature is inconsistent on this effect? Second, do higher property tax rates constrain house price appreciation? Third, how are lower property tax rates tied to the household tenure? Our conclusions suggest that some local governments actually collect less tax revenue as a result of excessive effective tax rates.”
Challenging Your Property Tax Bill
Appealing Your Property Tax Assessment: When, Why and How To (Bankrate, Oct. 6, 2022)
“Another way to determine if the value deemed by your county is fair is by examining other homes that were built in the same year and have similar square footage and improvements, along with other factors. You can include this information (perhaps with additional documentation, such as photos) with your appeal to help make your case.”
How to Appeal Property Taxes (House Logic)
“Ask a real estate agent to find three to five comparable properties — or comps in real estate jargon — that have sold recently. Alternatively, check a website like realtor.com® to find approximate values of comparable properties that are very similar to yours in size, style, condition, and location. If you’re willing to shell out $375 to $450, you can hire an appraiser to give you a professional opinion of your home’s value.”
Eight Key Steps When Challenging A Property Tax Assessment (Forbes, Dec. 1, 2020)
The following eight steps will help you successfully challenge your property tax assessment: do you due diligence when choosing an attorney and comparing local taxes, get a market analysis, take pictures of your property, contact your REALTOR or broker, schedule an appeal, contact the assessor’s office, have backup data at the ready, and compare data on local homes.
Property Tax (Tax Foundation)
Quarterly Summary of State & Local Tax Revenue (QTAX) (U. S. Census Bureau)
Significant Features of the Property Tax (Lincoln Institute of Land Policy)
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
How to Invest in Real Estate & Pay Little or No Taxes Use Tax Smart Loopholes to Boost Your Profits By 40% (eBook)
Books, Videos, Research Reports & More
As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.
Property Taxes in Illinois—What is the Effect of Rapid Increases and Large Drops in House Prices on Property Taxes? (University of Illinois, 2011) [PDF link]
Challenging the Conventional Wisdom of the Property Tax (Cambridge: MA: Lincoln Institute of Land Policy, 2010) HJ 4120 B14
The Worst Tax? A History of the Property Tax in America (Lawrence, KS: University of Kansas Press, 1996) HJ 4120 F57
How to Reduce Your Property Taxes (Miami, FL: Genesis Press, 1995) HJ 3241 Ad5
Reduce Your Property Taxes (Los Altos, CA: Crisp Publications, 1992) HJ 4120 T97
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