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2012-01-11 11:28:57

Real Estate Renovations Could Lower Property Tax

 

Considering updating your home or commercial property? While most people (in theory) should see increases in their property tax bill after improving their real estate, some in fact may see a decrease in their property tax payment. Why?

In every county in the US, a building permit or a real estate sale will trigger a reassessment of the property. However in most parts of the country, property owners are over-assessed meaning they pay too much, most property owners (about 95%) never challenge their assessed value. Compounding the situation is the fact that many counties across America only revalue real estate every few years, leaving many owners stuck with the amount their town tells them to pay.

Assuming your improvements are not excessive and greatly increase your property’s value, you may net a small savings like Joe Fisher from Farmington Hills, MI did this past year. Joe had purchased his home for $220,000 in 2006, his home would sell today for $150,000 at best. Joe had recently finished a kitchen and bath remodel and several smaller fixes throughout his 1800 square foot ranch.  These improvements prompted the tax assessor to change  his home’s taxable value to $175,000, nearly $40,000 lower than  his previously assessed value of $216,000, resulting in a $600 annual property tax savings.

While this savings hardly offset the $30,000 renovation, it was definitely a nice surprise to a young family.

To see if you may be overpaying your property tax, visit the site AppealTax.com.

 

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