A lot of people think that the process of filing their property tax grievance is very difficult, yet that’s not true. All you have to do is research a bit about it, fill out a form and after that, you just have to write a supporting letter. Once you take these steps, all you need to do is submit these papers by the deadline imposed by your municipality. Below we’ll tell you more about this process.
Understanding The Property Tax Grievance Process
In some cases, people believe that it’s their assessor who sets their property taxes, yet that’s not true. In fact, the role of the assessor is to determine your property’s market value by doing a comparable sales analysis similar to that of an appraiser or real estate agent when you plan to sell or buy a house.
Once the market value is determined, the assessor will calculate your assessed value by multiplying the value by a preset UPV that is set by your state. The purpose of the UPV is useful for the purpose of providing people a standardized assessment calculation that guarantees each property eventually receives a proper and equitable assessment. For instance, if your UPV is forty percent and your property’s market value is 500 thousand dollars, then your assessed value is 200 thousand dollars. If you have a neighbor and he has a property with a market value of 400 thousand dollars, then his assessed value will be 160 thousand dollars.
The Assessment Roll
Once the assessed value of all properties in a municipality has been determined, a roll will be published by the Assessors Office. This is practically a list that contains information about all the properties in the municipality (such as market value, assessed value, etc). In most municipalities, the roll is published in May (in the first week), ahead of the date the grievance applications are due. If you want to get the roll, you can go online or visit your local municipality. For links to your local roll publication, you may want to check www.randrealty.com.
The roll is very useful because once the property owners see their property’s assessed value (as calculated by the assessors), they can start preparing their grievances. Keep in mind that the roll doesn’t contain info about your property taxes, but only the property’s assessed value and its market value. These numbers will be used to calculate your taxes.
Researching Grounds for a Grievance
After the assessor has calculated your property’s market value, if you need to, then you can file a complaint about it. A property owner is able to make 4 separate claims for a grievance and this includes scenarios where his property has not been classified properly (for instance the property is residential, not commercial) or exempt from taxation (for instance, it’s a school or a church).
In general, though, people will file grievances because their property is subject to an Unequal Assessment due to the fact that people in their area who own similar homes have received a lower assessment. As a result, their taxes will be lower.
An Unequal Assessment claim is basically a claim in which you argue that your property’s market value is higher than the value the assessor calculated. To prove your claim, you have to prove that your home’s market value is lower than that of what the assessor calculated. After reviewing your property’s market value you realize that your property’s value is lower than what the assessor calculated, then you have grounds to file a grievance petition.
Your municipality establishes the deadlines by which you can file a grievance petition, so be sure to abide by them. In most of the Hudson Valley, this is called Grievance Day. On this day a BAR will meet to evaluate the grievance petitions. They’ll also hold an open hearing, meaning that you can present your case in front of them.
To grieve your property taxes, you just have to submit 2 documents when filing the petition. The first one is form RP-524 or the Complaint on Real Property Assessment.
The second file is a letter of support. There are no standards as to what the letter should contain, but you should address the BAR in it (for your particular municipality) and briefly explain why you believe your property has been overassessed. Along with the letter, you can also attach supporting documents, including public records, comparative market analysis from a real estate agent, an appraisal, etc.
In the petition, you need to mention the relief you want. In this case, you want your property’s market value to the reduced to a level you’re happy with. Try to ask for as much relief as you think you deserve to get.
You don’t necessarily need to attend the Grievance Day hearing. Even if you’re absent, a swift decision will be taken by the BAR after they carefully read your petition.
If your grievance complaint isn’t successful, which is often the case, or it was, but you failed to get the relief you asked for, then this decision can be appealed in a Supreme Court trial or in what’s known as a SCAR(Small Claims Assessment Review).
As you can see, if you want to grieve your taxes, then the process is nowhere as difficult as you think. All you have to do is keep an eye on what’s happening in your local community, carefully review the assessment role and finally file your complaint and add any supporting documents along with it. All of this needs to be done by Grievance Day. If you don’t have the time to do this or maybe have other reasons for why you don’t want to personally consider it, then you may want to hire a property tax grievance company to do it on your behalf. Property tax firms that handle such cases usually charge anywhere between forty to fifty percent of the first year’s savings on your taxes. Also, bear in mind that they will only charge you the fee if they’re successful. If you’re not successful though, then you will still require a tax grievance firm to appeal the BAR decision.
Whether you believe in resolutions or not, making a list of action items can help you achieve your goals in 2017!
Here are some great items to add to your list as you set goals for the new year, and set yourself up for success!
1- Review your business plan.
Now is a great time to think about your real estate business plan. What do you want to achieve this year? Are you looking to increase revenue? What about expanding your team? Think about what you want to accomplish, create an action plan to meet your goals.
2- Start networking.
Expanding your network can go a long way in growing your real estate business. Networking can provide great resources for learning more about related industries. There are countless networking groups on-line and off! LinkedIn is a great place to join groups and Meet Up can direct you to local live networking events.
3- Start blogging.
Blogging is a great way to connect with other agents, businesses and create new leads. It’s a great way to interact with new audiences, and connect you to other professionals who could help generate new business.
4- Personalize your services.
You already know how important it is to set your business apart from the rest. Personalizing your services will help differentiate your services from other agents. Offering suggestions for services such a property tax grievance can help home sales and save buyers money. Personalized closing gifts are another simple way to identify yourself. Pay attention to your client’s likes and dislikes, so you can give them a positive experience.
With rapidly changing technologies and virtually unlimited access to information, agents have to adapt and find unique ways to accommodate their clients’ needs. Here are a few thoughts about being an indispensable agent.
1. Your marketing strategy.
In order to stay relevant, and in business, agents need effective marketing strategies. Effective advertisements feel authentic and organic and focus on lifestyle. Are you taking advantage of social media outlets? Facebook live will help you show up in more news feeds so your content gets seen by more people.
2. Customize your services.
Your customers want everything to be about them. Anything you send them should be tailored specifically to their interests and needs. Personalize their experience from beginning to end and include recommended additional services like home stagers and property tax grievance! Don’t limit your services to just the transaction; provide them with concierge-style services.
3. Create your brand.
Creating a brand is an absolute must when it comes to real estate. Your brand is what separates you and makes you stand out from the rest! Your brand should speak volumes about your services, knowledge and your ability to help them have a positive experience. What’s your tag line?!
4. Become an industry leader.
Although it takes is time, be consistent in your efforts. Establishing yourself as an industry expert will be your best asset. When you’re quoted in a news article, when you have a strong online presence, you become a greater asset to your client.
5. Be a wealth of knowledge.
Offer your audience knowledge on not only the current real estate market, but also on the lifestyle available in the local area. Your audience is looking at you as their guide not only for their home but also for the places they’ll shop and where their children will go to school. They rely on you to give them insight into everything there is to know about the area where they are focusing their search.
Before we answer that, we need to, first of all, define assessment. The assessment is practically the basis of the real estate tax bill. In general, this bill is your assessment times the tax rate. Your home’s assessment is a certain percentage (that may change on a yearly basis) of your property’s fair market value (FMV). So basically, homes that cost more have greater real estate taxes compared to homes that are priced lower.
On the other hand, issues may arise due to the fact that your tax’s basis is FMV, yet determining it can be quite difficult. Also, even when estimates are made, they can be eventually disputed with ease. Issues may also arise because sometimes, assessors lag behind the moves happening in the real estate market and therefore, assessments can get stale. The lawmakers in NY have actually admitted that making fair assessments is very difficult and that is why they worked hard in order to ensure that homeowners can use a special system that allows them to get access to a fair assessment.
The system is composed of 2 parts:
The 1st level: The homeowner files a complaint at the local assessment department where he requests that the assessment is reviewed. The homeowner’s complaint raises the issue that the assessment is a greater percentage of the FMV that the law allows. Next, the evidence is carefully reviewed by the assessor who may eventually decide to schedule an in-person negotiation with the homeowner prior to taking a decision.
The 2nd level: In the event, the homeowner doesn’t agree with the assessor’s decision, he can file a petition with the court for a Small Claims Assessment Review. This is practically a lawsuit and the fee for filing it is thirty dollars. After the lawsuit is filed, both sides need to provide relevant case data in order to defend their position. After analyzing the data, the court will make a final decision.
Filing your tax grievance on your own is certainly possible and in order to do so, you’ll only have to assess the market value of your property, followed by filling out your Grievance petition and finally writing a letter in support explaining your position. However, in doing so we highly recommend that you hire a professional who can help you with it. While it’s not actually mandatory that you do so, in our experience we have come to the conclusion that someone who has a lot of experience in this is going to help you go through the process a lot easier. So with that in mind, here are 5 reasons we believe hiring a professional to file your tax grievance is a good idea:
1. You only pay if you’re successful
In general, professionals are going to represent their clients in a tax grievancecomplaint for fees that range between forty and fifty percent of the tax savings in their first year. For the client, this is a great deal. On top of that, you don’t need to worry about paying anything unless you’re successful. Therefore, the has every incentive to improve his client’s tax savings.
In the event the client is successful, he is going to take advantage of the minimized assessment for a very long time and be required to pay the professional a small part of the savings he makes in the first year. Depending on the lawyer you hire, some of them may charge a lower fee based on the savings paid out over more than 1 year (for instance, one example would be twenty-five percent of each year’s savings for a total of 24 months). This is still a great deal. On the other hand, our recommendation is that you don’t hire professionals who charge upfront fees or professionals that charge a fee higher than approximately fifty percent of 12 months’ worth of tax savings.
2. Professionals can handle all the work on establishing a market value
Establishing market value can be difficult when filing the grievance, but luckily your professional has access to public records, but also to the info provided by the licensed real estate appraisers. He can also provide you a great evaluation of whether pursuing your tax grievance is a good idea and that’s because someone with a lot of experience in this can accurately gauge the tendencies of the local boards when evaluating various kinds of petitions.
3. Professionals are well accustomed to the Grievance Day hearing
Professionals can easily speak in open hearings and it’s highly recommended that you let one represent you on this day. For a layperson, the entire process can be quite confusing, but your attorney will certainly be able to successfully go through it.
4. It takes a lot of time to grieve your taxes
Tax grievances can be very time consuming, since they involve a lot of research, filling out forms, writing support letters and finally preparing for and attending the hearing. Therefore, if you think you cannot handle this on your own, then it’s best to hire a professional to help you with it.
5. If you don’t win the grievance, the professional can handle your appeal
If you’re not successful, then you should consider hiring a professional in order to help you handle the grievance appeal on your behalf. In fact, it’s highly recommended that you hire one to represent you in the first administrative hearing in front of the board. This way, he’ll learn more about the facts and use that information to better represent you, his client. So if you’re going to need to pay for hiring a professional anyway in the event your petition isn’t successful, then you may want to consider hiring one to handle your case in its entirety.
It’s true that the US tax code is indeed intimidating and because of that, many Americans don’t really want to dig through IRS forms and receipts each spring. The good news is that if you’re the proud owner of a home, then you can take advantage of many deductions that can save you a lot of money in taxes this year. Because of that, it’s certainly not a good idea to let the fear of paperwork intimidate you.
If you’re looking for the best tax breaks, you could easily get the biggest bang for your dollar from your home deductions. If you overlook them, then they may just cost you.
For instance, let’s take the most popular deduction, the interest that you have to pay on your home mortgage. Collectively, US taxpayers get a break of approximately one hundred billion dollars a year from this item alone.
As a homeowner, you certainly have access to such breaks plus many others which can save you a lot of money every year. Here are the 7 biggest ones we think you should know about.
This is the most popular break for taxpayers. So if you have a thirty-year mortgage on a two hundred and fifty thousand dollar home, this is going to result in approximately ten thousand dollars interest payments over the first year. You should also not forget about the condo or vacation home you bought, since you can easily use the interest you paid on those, as well.
Real Estate Taxes
The deduction for local properties is yet another great tax break for Suffolk and Nassau County homeowners and the good news because you live on Long Island, it can be pretty high. In a lot of ways, this tax break is more common than many others, including the mortgage interest deduction. While many people own a property and do not have a mortgage, everyone pays real estate tax.
If you’ve borrowed and do not have twenty percent equity in your home, then you have to get PMI (Private Mortgage Insurance). This is required for the protection of the lender, in case the loan defaults. PMIs usually costs between point five and one percent of the entire loan amount per annum, so if you have a large loan balance, then deducting these payments can add up fast.
When you have 1 point on your home mortgage, that point is valued at one percent of the total loan amount and it has to be paid upfront to the lender in order to minimize your total interest rate. Because of that, many lenders pay points for the purpose of getting a better lending rate and the good news is that they’re also going to get a tax break.
However, it’s only possible to deduct the amount of the points paid in the year you’ve paid them, so if you bought a home in the past year and paid points, then make sure you don’t miss this break.
If your home is damaged by fire or a storm, then you can offset some of the losses thanks to the tax break provided by the IRS. Even if you do have a home insurance policy, you cannot double-dip and get compensated twice for the losses. However, if you have a great insurance policy, you may still receive some tax benefits. You can easily find out how much (if any) of your losses are tax-deductible by doing some simple math on Form 4684.
In case you’re self-employed and own a home that meets IRS standards, you can take advantage of some pretty great tax benefits. For example, let’s say that your home office represents five percent of your home’s entire square footage. In this case, you’re eligible to deduct five percent off your property’s taxes, insurance, utilities, but also general repairs. Just keep in mind that there are strict rules in place on what constitutes a home office that sees exclusive or regular use. Because of that, you need to speak to your tax consultant or check Publication 587 to verify whether you qualify for this deduction or not.
As a single taxpayer, you can sell your main residence for a two hundred and fifty thousand dollar tax-free gain, while if you’re married, then you can do so for double that amount. However, if you managed to maintain accurate records of any capital expenses on your property, then it’s easy to increase the tax-free gains beyond those limits. While $500 thousand dollars sounds like a lot of money, over a thirty-year mortgage there can be a major appreciation in your real estate market. As a result, even if this year you won’t actually use the documents from your capital improvements, make sure to keep them until you plan on selling your property.
Residential Energy Credit
When it comes to big-ticket systems, such as geothermal heating units and solar panels, you get a thirty percent tax break from the REEPC (Residential Energy Efficient Property Credit). This also includes smaller amounts on items such as water heaters. It’s true that compared to the rest of the breaks, these ones are smaller, but the good news is that they’re a credit and not a reduction.