Real Estate Profits

The Property Tax Appeal System and Its Built-in Flaws
Author: Dave Dinkel

I know it’s hard to believe that a governmental system has flaws; it’s what they call an oxymoron like “giant shrimp” or a “flawless government”. The fact is most government bureaucracies have too many or too few staffers and a built-in system of getting bigger and bigger with more money and not losing “weight” fast enough when budgets are cut!

The tax appraisal system inherently has flaws in the way properties are evaluated by a one-in-five year reappraisal, or no reappraisal except by appeal, that usually doesn’t actually look inside a property. For example a small fire will render a property uninhabitable while the structure may look untouched from outside. Recently, I inspected a building and it had been uninhabited for five years because of an un-repaired roof leak. The exterior was in perfect shape but the inside of the property was “eaten away” by termites, covered with mold and mildew and had rotted wood everywhere. The owner had been paying taxes on the full tax assessed value for the past five years and couldn’t understand why his taxes has increased every year despite the property being uninhabitable!

Had he realized his rights as a property owner and tax payer, he could have had his taxes reduced until he could repair his property. In fact, he was in foreclosure because he couldn’t afford the 200% tax increase over the past five years while not having any rental income from the property.

Another unfortunate occurrence lately is that because of foreclosures thieves are targeting foreclosed properties for their metal wiring and pipes. Thieves are breaking into foreclosed and vacant property and stealing all the wiring in the walls and the circuit breaker boxes as well as all the copper pipes in the properties. Even evicted renters have been doing this to make some extra money and get back at the landlord who evicted them. There is legal recourse against renters who do this but thieves who actually break-in are seldom caught.

So in cases where the property’s value has changed substantially and quickly, the tax assessor has no way of knowing of these changes. If he did know, he would not change these values as the property owner has to request a hearing to make a case for a tax assessed value reduction.

The largest flaw in the tax assessor’s system is the inherent technical nature of the appeal system. It is not meant to be user friendly and, in fact, is complicated and difficult to work in because of the strict evidence requirements and harshly limited filing dates (usually two weeks or less). The date of the appraisal or assessment is as of January 1st of the previous year. This means that property owners must reconstruct data from over 18 months before for comparable sales; current market value and sales do not matter at all. In addition, concise evidence and its submission format must be adhered to or the application is denied with little or no chance for re-submission.

Why is this? Because the “system” protects itself and its employees! If every tax payer would automatically appeal his assessment, the system would virtually collapse under the paper work. This is largely overcome by denying any reduction in the first appeal level at the tax assessor’s office even while only about 2% of the property owners actually request a hearing at this first level. It is estimated that 95%+ of all appealers go home empty handed and never try again. At this stage the clerk usually offers comparative proof that may not be comparing “apples to apples” but most property owners never know the difference or what to do next.

So what is a property owner to do? The best and simplest answer is to use the system to defeat the system by using professional tax appealers who know what they are doing and can look for typical, but also obscure issues that the average property owner wouldn’t even consider. The system itself has set up these strict requirements of evidence and filing which, if complied with, make a strong case for re-appraisal. This requirement of factual proof then becomes an inherent flaw within the system itself, just waiting to be used by appealers who understand them!

So, why not let these tax appealer professionals do battle with the system and use its internal flaws against it? There is no reason except possibly you are unwilling to pay someone to do a professional do what you as an amateur think you can do better and save a little money. If you believe you can do better, go for it, as we wish you the best of luck.

Article Source: http://www.articlesbase.com/real-estate-articles/the-property-tax-appeal-system-and-its-builtin-flaws-481094.html

About the Author:

Dave Dinkel is the President of Homeowners United, Inc. which is an advocacy group dedicated to helping property owners in every way possible. For more information and a free e-book detailing the tax appellate system, go to www.moneybacktoyou.com

How to Lower Your Property Taxes
Author: Roni Deutch

Understand Your Local Tax System
Different local governments use different methods to determine home values and assess the related taxes. Call your local tax assessor’s office and ask how they determine home values. Typically, local governments calculate your property taxes based upon the value of your home. How the value of your home is determined has a huge impact on the amount you pay. If local laws or home values change, you might be able to reduce your tax liability.

Review Tax Property Card
Request to view your property tax cards from your local assessor’s office. The card provides you with information your local government gathers about your property. It includes information about the lot size, house size, room measurements, and the type of fixtures located within the home. It can even include information on special features, or notations about any improvements that have been made to your house.

Think Twice About Remodeling
If you plan to make any structural improvements to your home, it will increase your property tax bill. These include decks, pools, storage sheds, or any other permanent fixture that will increase the value of your house. Keep this in mind when you are calculating the total cost of the project. You can call your local tax departments for assistance.

Limit Curb Appeal
Tax assessors use a very strict set of guidelines when evaluating a house. However, the assessment does contain a certain amount of subjectivity. For example, more physically attractive homes will receiver higher assessments. In addition, property is always being compared to other houses in the area. Try not to make too many cosmetic improvements to your house before an assessment. Also, avoid any physical improvements to your house such as new counter tops or stainless steel appliances until after your home has been assessed.

Walk with the Assessor
Most people will allow the tax assessor to wander around their homes unguided during their evaluation. This can be a huge mistake as some assessors will only see the good things in a house and might overlook areas where the home is lacking. To make sure this does not happen, walk through your home with the assessor and point out both good and bad points. This ensures you get the fairest possible value of your home.

File an Appeal
If you think the value of your property is incorrect, then file an appeal to your local taxing authority. Within a few of weeks you should receive a notice acknowledging your appeal. Note that it can take months to get your appeal heard. Before the day of your hearing, it is a good idea to attend a local a hearing to get accustomed to the proceedings.

Move to a Lesser Taxed Area
Every local government has different property tax rates. Just by moving a few miles you may be able to greatly reduce your property taxes. However, before making any rash decisions, always perform ample research on the local tax rates.

Article Source: http://www.articlesbase.com/taxes-articles/how-to-lower-your-property-taxes-387601.html

About the Author:

The Tax Lady the Roni Deutch opened the Roni Deutch Tax Center to fill the need in this country for competent income tax return preparation. Earlier in the month the company launched 12DaysOfTaxes.com”>http://www.12daysoftaxes.com”\”>12DaysOfTaxes.com to encourage taxpayers across the country to celebrate tax season.

Will Your Property Taxes Go Down Now That Your House Is Worth Less?
Author: Syd Z. Nohcud A

It is often noted that over the last ten years the price of an average home in the United States in “real term” has more than doubled.

What this means is that you were able to sell your home, in essence to cash in your chips as it you were at a gambling casino, and buy a representative basket of other non real estate goods – be it tomatoes, movie admission passes, corned beef, cars, garden plants you would be able to buy double the amount that you would of just 10 years ago.

I am sure you noticed that along with your new found wealth as a result of your real estate investment that your housing and realty taxes increased as well. Not only are you rich in terms of net valuations but you also having higher taxes on your property.

Property taxes are assessed by cities and municipalities on the “assessed valuation” of the home or property. In the end it your annual property tax bill, that comes in that nice official envelope from realty tax central all comes down to the valuation of the property on hand. It is often said that you can count on two things in life – death and taxes. Property tax is an “ad valorem” tax that an owner of real estate or other property pays on the value of the property being taxed. Sure you are rich – in terms of the valuation of your house but simply put – the more your house is worth, the more realty tax you will pay and be paying every year.

Unfortunately what has happened is that most Americans are not diversified in terms and their assets and investments. With the stock market crashes and low interest rates paid it seemed that the only place that “they could make money’ was in their house. Low interest rates allowed many to purchase houses, condos and even vacation cottages and condos that they could never afford otherwise. Low interest rates meant low mortgages.

Many could now afford substantial properties that they never could have afforded in any way before. The circle went round and round- low interest rates meant others could afford those properties as well. Housing prices went as a result of the increased demand. The home buyers now congratulated themselves on the wise choice of their investment in their home. Real estate it turned out was a million times better an investment than anything else. A million times better than the risky stock market, Interest rates on certificate of deposit would have paid you virtually nothing. On top of that a feeding frenzy arose in the real estate market as people who were not buyers of real estate or who had planned to be in the future rushed into the market in a panic lest they be “locked out forever” of their dream of buying a house , condo etc.

The fallacy in this logic is that these people are house rich and cash poor. They had not diversified their investments. At the time it seemed like a wise idea – in terms of rates of return and other options. After all they “only made so much land” and “real estate always goes up”.

Back to the topic of taxes and realty taxes. The housing bubble has “burst”. Housing prices seem to be in a correction – on the way down.

You may well wonder. If the value of my house has come down so should my realty and house taxes. Don’t count on it. Actually it is highly if ever doubtful. Your city or municipality needs that revenue stream as much as you do or perhaps even more. You at least can “cut back”. You can eat hamburger instead of steak, you can choose not to purchase that new car you wanted. However your tax money has been incorporated in budgets and planning for a long time coming. It’s spoken for. On top of that you can hardly expect that civil servants will take a pay cut or that the whole civil service will become amazingly productive – at least in the near future.

What can you do? It all comes down to valuations and homework. Have your house value assessed. You can do an initial assessment by comparing your home to other homes in your area that were recently professionally evaluated. You can check on the internet and with local real estate agents what similar housing and real estate in your area has sold for. Not so much the asking price but rather the actual sales price.

Now that you have a good general idea from a couple of sources it may be wise to spring and hire a professional property evaluation or property inspection service. You can find these services in your local yellow pages or with a search on the internet. If you are stuck and cannot find one- ask a local real estate agent or company.

Next compare your taxes to other similar priced properties. First in your area and later outside your direct area, but in your municipality.

Many cities now actually list home valuations and taxes on the internet freely to the general public. If not real estate listings may give you the data.

In the end it all comes down to valuation of your property. You can file an appeal of your realty taxes. Your case can rest on two points of discussion. First that your home taxes are out of line and too high, compared to other similar properties. Second you can argue that the valuation of your house upon which these property taxes are based is wrong. According to the cities own calculations you should be paying much less tax.

In the end as they say “It’s Your Money” “And Your House”. Ensure you do your homework of property valuations and tax rates in a thorough, detailed and systematic manner.

Article Source: http://www.articlesbase.com/real-estate-articles/will-your-property-taxes-go-down-now-that-your-house-is-worth-less-278552.html

About the Author:
Grow Your Wealth Winnipeg Mortgage Property Tax Appeal.

Why Would a Real Estate Investor Be Helpful in a Property Tax Appeal?
Author: Dave Dinkel

Property tax appeals are successful based on an adjustment of the tax assessed value of the property in question. Whether this property is a commercial property or a homeowner’s homesteaded house, there is a basis for an adjustment of its value based on the condition of the property and other pertinent factors.

Real estate investors traditionally have bought distressed properties, fixed them and resold them at full market value. This process has revitalized many neighborhoods and created wealth for everyone involved including all the neighbors. These investors take the risk of losing money from a declining real estate market, having holding costs and rehabbing costs exceed their expectation, and being unable to find a buyer at their break-even cost.

Investors quickly gain a sense of what is wrong with a property and the cost to fix it quickly and efficiently which is critical for ultimately making a profit. If they don’t “get it” they will be bleeding money in no time at all. Investors who take on huge rehabs should approach their tax appraiser immediately for tax relief through re-appraisal. If the period for application has expired, there are ways to appeal the process.

This experience and knowledge of the repairs needed and the comparison of other houses in the neighborhood are the essential human tools for re-appraising a property for the tax-appraiser. When investors make their presentation to the homeowner to buy the property, they go into detail about the properties deficiencies that reduce its resale value. Again these are generally the same deficiencies that the tax assessor is unable to see from his office and may significantly reduce the tax assessed value.

For example, these deficiencies can be: structural, code violations that must be remedied before a certificate of occupancy can be issued, the structure is in such poor condition it should be demolished, property needs major mechanical systems (roof, HVAC, electrical, plumbing, septic or sewer system, etc.), boundary disputes, title deficiencies or deed covenants, traffic patterns or changes in them, noise abatement issues, proximity to “nuisances”, and many, many more deal-breaker problems that investors face on almost every deal they look at.

Therefore, investors have a learned sense of what is wrong with a property and what needs to be fixed to bring it up to par with the properties in the neighborhood to make it able to sell. This business savvy can be gained by hiring a contract, appraiser, home inspection company, roofer, plumber, electrician or other tradesman for each property their review. The simpler answer, and the way the investors learn themselves is to just do it and make mistakes, and sometimes early in their careers, they make very costly ones!

These deficiencies in the properties are what make the profits for the investor if they rehab them. These same deficiencies are what “depreciate” the tax assessed value of these properties. So, who is better qualified than a competent investor-rehabber to analyze the inflated value of a property? If your professional tax appealer doesn’t have at least a few investors as well as competent appraisers, look for another service so you don’t lose valuable time with a firm that doesn’t have the same “street smarts”.

Article Source: http://www.articlesbase.com/real-estate-articles/why-would-a-real-estate-investor-be-helpful-in-a-property-tax-appeal-481079.html

About the Author:

Dave Dinkel is the President of Homeowners United, Inc. which is an advocacy group dedicated to helping property owners in every way possible. For more information and a free e-book detailing the tax appellate system, go to www.moneybacktoyou.com