Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.
Today’s question is about property taxes; specifically, if there’s a way to freeze your taxes to keep them from going up, especially if you’re a senior.
Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.
You also can learn how to send in a question of your own below.
For more information, check out “Ask Stacy: How Can I Fight My Property Taxes?” and “12 States Where Older Homeowners Can Defer Property Taxes.” You can also go to the search at the top of this page, put in the words “property taxes” and find plenty of information on just about everything relating to this topic.
Got a question of your own to ask? Scroll down past the transcript.
Don’t want to watch? Here’s what I said in the video
Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by Money Talks News, serving up the best in personal finance news and advice since 1991.
Today’s question comes from Karen:
“Have you ever heard of freezing your property taxes? Is that even possible?”
Property taxes are the way local governments keep the lights on. If you own a home, you likely pay them. And even if you rent, you pay them indirectly, since they’re a cost the landlord is apt to pass along. And they can be problematic, especially for those on fixed incomes, since they often increase over time.
The good news is nearly every state has some sort of program to help its citizens, especially seniors, deal with property taxes. But the types and availability of programs vary widely.
Let’s start with the program Karen asked about: property tax freezes.
Property tax freezes
A property tax freeze, as the name implies, prevents property tax increases for eligible taxpayers. In most cases, however, these programs are voluntary. In other words, a state program doesn’t guarantee statewide availability because some local governments may choose not to participate.
According to the National Conference of State Legislators (NCSL), the following six states offer property tax freezes. None are automatic. You have to apply and be accepted.
- Connecticut: Available to homeowners age 70+ — No income limit
- New Jersey: Available to homeowners 65+ — Income limit: $70,000
- Oklahoma: Available to homeowners 65+ — No income limit, but local governments may set asset limits
- Rhode lsland: Available to homeowners 65+ — Income limit: $4,000
- Tennessee: Available to homeowners 65+ — Income limit set by counties
- Texas: Available to homeowners 65+ — No income limit
Property tax freezes are just one way that states try to help those of limited means. Nearly every state has some sort of program to help senior or low-income taxpayers, including homestead exemptions (exempting part of a home’s value from taxation), tax freezes (discussed above) and assessment freezes (limits on property value increases).
To find out if you might be eligible for a program in your state, you could comb through sites like the NCSL’s or search your local government’s website. But the fastest, easiest and most accurate thing to do is old-school: Pick up the phone, call your county assessor’s office and ask about it. In my experience living in various parts of the U.S. over the years, these folks are typically friendly and easy to talk to.
Other methods to lower your property taxes
If you’re not a senior or a low-income citizen — or otherwise unlikely to catch a tax break — there still are things you can attempt to lower your property taxes.
I’ve successfully appealed my property taxes twice over the years, once in Arizona and another time when I lived in Ohio.
In my experience, appealing tax bills isn’t all that difficult. And because it can result in saving hundreds — even thousands — annually, if you think you have a case, you should try it. Here’s how:
Step one: Check the value your county is placing on your property. You can often find this information online. If the assessed value seems too high, take the next step.
Step two: Contact your local property assessor’s or appraiser’s office and find out how they arrive at values. For example, in my county, the appraiser’s office uses property sales to determine values, placing more weight on more recent sales.
Step three: Play to win: When it comes to challenging a value, the first thing to do is make sure there are no mistakes. Does the county have your correct lot measurements? How about the square footage and age of your house? Verify everything.
While you can argue that your county inflated your home’s value, your ultimate weapon is an appraisal. If the county says your home is worth $200,000, but a licensed, independent appraiser says it’s worth only $150,000, it’s going to be a hard argument for the county to win.
An appraisal will set you back a couple hundred bucks, but depending on your county’s rules, it may be necessary.
This is just a quick look at protesting property taxes. Check out “Ask Stacy: How Can I Fight My Property Taxes?” for more.
I hope that answers your question, Karen, and I’ll see you all next time!
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The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.
I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.