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Disputing Your Property Value Assessment to Lower Tax Liability

man inspects outside of building holding digital tabletLessening the tax liability on your rental property is definitely worth the effort if you have the opportunity. Regardless of whether you are new to rental property investing or a seasoned pro, studying your Big Rapids property value assessment to determine whether it’s correct is time well spent.

At Real Property Management Investment Solutions, we advise all of our landlords to take the time to do this because you may discover that your assessment is excessive, which can lead to fewer property taxes once re-evaluated. There are various ways to determine whether your current property assessment is right.

How a Property Should be Assessed

Properties are usually assessed annually by a town or city’s assessor. In many cases, the assessor examines the current status of your property and any improvements done and the current market conditions for similar homes in your area, and then they multiply that by the area’s level of assessment as decided by the municipality. If you have a multi-family building, the assessor will include in the valuation the income earned from the property over the past year minus maintenance costs. The cost of replacing the home is also considered in determining its assessment.

If you open your annual property tax bill and almost collapse from shock at the figures, take some deep breaths and carefully think of the options you have to reduce the tax bill. One thing to keep in mind, however, is that there is a deadline to dispute the assessment. Most municipalities will offer 30 to 60 days after receiving the assessment to challenge it.

How to Understand an Assessment

Observe what the assessment says about your property. You could discover that you’ve suddenly become the owner of property that is nothing like the one you actually own. For example, the assessment might erroneously give your house four bedrooms when it only has three or the assessment might place your address in an upscale neighborhood near your actual location. In one case, a homeowner’s one-story home with vaulted ceilings was incorrectly listed as a two-story house and charged double the actual square footage because the assessor viewed it from outside rather than doing a more comprehensive assessment.

The value of similar properties in your neighborhood can say a lot about your own property’s assessment. If you are friends with your neighbors, you may be able to learn from their assessment. Otherwise, it’s practical to compare your property with four or five in your general area that have the same amount of square footage and the same property size.

Look into Exemptions

While taking the time to ensure the valuation of the property is correct, also check whether you’re receiving any exemptions to which you’re entitled. A number of states and municipalities offer breaks to owners who are senior citizens or veterans, homes located in specific areas, and other exemptions. Your local tax assessor can help you find any tax breaks to which you’re entitled.

If the first tax bill after you purchased your property shows that its tax assessment value increased by almost 50 percent in one year, as what happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Majority of tax assessors are willing to informally explain your assessment. If you’re not satisfied with the informal explanation, you can make a formal appeal. Property owners who have gone this route say they’ve been able to lower their assessments substantially.

When you work with Real Property Management Investment Solutions, we help you get the most out of your property and navigate it to success.

If you are interested in having your property managed by Real Property Management Investment Solutions, have more questions, or just want to speak to one of our team members, then contact us online or call us directly at 616-419-8880 today!

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.