Protesting Property Taxes

 

Effective Strategies To Protest Property Taxes for a Rental Property

As a homeowner, you may know how to protest property taxes on your primary residence, but how do you go about protesting the taxes on an investment property. This guide will help explain how you can effectively protest property taxes for rental properties.

How property taxes work for investment properties

To successfully protest property taxes on a rental property, you must first understand how the assessment of investment property works and what factors contribute to the total taxes you owe. Tax assessors typically base Real estate property taxes on the property's market value. They consider the size and features of your property and apply the tax rate set by your municipality to calculate your total property taxes.

You should also understand that investment property owners are not eligible for the same exemptions as owner-occupied homes, meaning the assessed value of your property is likely to be higher. For example, investment properties do not qualify for the homestead exemption, which allows you to lower your property taxes by capping the number of taxable value increases on your home.

Strategies for protesting investment property taxes

There are several strategies you can use to protest your investment property taxes. Below are the most common methods used by investors are:

1. Look for errors in the assessment

Often, an assessor may make mistakes when your property. Errors such as incorrectly measuring the square footage of your property, the plot size, or including inconsequential features are grounds for protesting your property tax. Therefore, if you believe the assessor has made an error, you can appeal the assessment and have your property taxes lowered accordingly.

2. Compare your assessment to comparable properties 

If you do not believe the assessor has made an error, you can still protest your assessment by comparing it to similar properties in your area. This process is known as a market value analysis. To do a market value analysis, you will need to find comparable properties recently sold in your area. Once you have found these properties, you can compare them to your property to see if your assessment is fair. 

3. Is the assessment reasonable

The most crucial factor in a property tax appeal is whether the assessment is reasonable. Therefore, if it is unreasonable and the value exaggerated, you have grounds to protest the property tax.

4. Gather evidence to support your case

Once you have decided on the best strategy for your appeal, you will need to gather evidence to support your case. The evidence may include recent sales data for comparable properties, property tax bills, photographs, or appraisals. 

Seek professional support

Protesting your property taxes can be a complex and time-consuming process. If you do not have the time or resources to protest your property taxes, you can always hire a professional firm to do it for you.  A professional will have the experience and knowledge to negotiate effectively on your behalf and get your property taxes reduced.