If you just bought a home, it might be a good time to check the accuracy of your property tax rating, experts say.
Your property tax assessment is a way for officials to determine the value of your property for tax purposes. Inaccuracy about your home can mean that factors in that formula mean you are overpaying.
According to Sal Cataldo, a real estate lawyer and partner at O’Doherty & Cataldo in Saville, NY, there could be most of the important documents that need to appeal as part of a recent home purchase.
For example, the title report intends to tell you the age of the house, Kataldo said. There is a home inspection report detailing property defects, valuations and mortgages, showing the home’s value and comparable value for the neighborhood.
“You’ve got a wealth of information about your home, whether you’re aware of it or not,” Cataldo said.
More details from personal finance:
House Republican bill calls for a larger child tax credit
College majors with the best and worst job prospects
Here’s how you can save on food in the midst of food price inflation
Home sales usually cause a reassessment of property taxes as assets are changing their hands. The new market value applies to the valuation. However, new values will be applied and certain rules for frequency of reassessment depend on your region.
As a newly built homeowner, here’s why it’s worth reviewing property tax ratings on your to-do list:
Asset taxes are on the rise
In addition to mortgage payments, home insurance and maintenance costs, property taxes are another factor to consider when evaluating housing costs.
In recent years, property taxes have been rising due to rising housing values and tax rates.
According to a Realtor April report, the median US property tax bill in 2024 was $3,500, up 2.8% from $3,349 in 2023.
How much you pay depends greatly on where you live, with some areas seeing higher bills and price increases.
As of 2023, the median property tax for homeowners in New York City was $9,937. The city is ranked first among the metropolitan areas with the highest median property tax. The top three are San Jose and San Francisco, California, where homeowners paid $9,554 and $8,156 respectively.
Inaccuracy may cost you
It is not uncommon for property to be overvalued. So you’re paying more taxes than you should have, said Pete Sepp, chairman of the National Taxpayers Union Foundation: “It’s about paying to check.”
Sometimes, that’s because the details of your rating have not been revised over the years. For example, the wrong area of a livable space or the amount of bathrooms you actually have in your home.
NTUF estimates that 30% to 60% of U.S. taxable assets are overvalued based on reports from tax evaluators in individual states.
The successful appeal could lead to savings for several years, as changes are the basis for next assessment, Sepp said. Some states or local governments reassess each year, while others have low frequency cycles with a gap of several years. Some people don’t have a set schedule at all.
According to Realtor.com estimates, more than 40% of homeowners across the US could save more than $100 a year by protesting their valuation value.
