Reducing the tax liability on your Raleigh rental property is well worth the effort if you get the opportunity. Regardless if you are new to rental property investment or a seasoned pro, studying your Raleigh property value assessment to establish whether it’s accurate is time well spent.
At Real Property Management Excellence, we advise all of our landlords to take the time to do this because you might realize that your assessment is too high, which once re-evaluated can lead to lesser property taxes. There are many ways to determine whether your current property assessment is correct.
How a Property Should be Assessed
Properties are typically assessed yearly by a town or city’s assessor. In most cases, the assessor reviews the current status of your property and any improvements performed and the current market conditions for similar homes in your area, then they multiply that by the area’s level of assessment as established by the municipality. If you own a multi-family building, the assessor will factor into the valuation the income collected from the property over the past year minus maintenance costs. The cost of home replacement is also considered in determining its assessment.
If you open your annual property tax bill and nearly collapse from shock at the figures, take several deep breaths and then carefully consider the options you have to lower the tax bill. One thing to remember, however, is that there is a deadline to dispute the assessment. Most municipalities will give you 30 to 60 days after you receive the assessment to contest it.
How to Understand an Assessment
Look at what the assessment says about your property. You may find that you’ve suddenly become the owner of Raleigh property that is nothing like the one you actually have. For example, the assessment might mistakenly give your house four bedrooms when it only has three, or place your address in an upscale neighborhood adjacent to 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 thorough inspection.
The value of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you might be able to learn from their assessment. Otherwise, it’s a good idea to compare your property with four or five in your general vicinity that have the same amount of square footage and the same property size.
Look into Exemptions
While taking the time to make sure the valuation of the property is right, also look into whether you’re receiving any exemptions to which you’re qualified. Some states and many municipalities offer breaks to homes located in certain areas, owners who are senior citizens or veterans, and a number of 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. Many tax assessors are willing to informally clarify your assessment. If you’re not happy 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 Excellence, we help you get the most out of your property and navigate it to success. To learn more about the services we offer, Please contact us online or call us at 919-827-1107
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