As a homeowner, one expense you cannot avoid is your property tax. Luckily, there are ways you may be able to lower your tax!

Tip #1: Select the location of your property carefully

Your local county / city uses property tax revenue to fund public services such as the fire departments, police departments, schools, and other infrastructures of your locality. Different localities apply different rates. For example, New Jersey has one of the highest property tax rate and Louisiana has one of the lowest. By taking time to select your area before investing in a home, you can minimize your property tax bill.

To know more about the ranking of tax jurisdictions in the US: click here

Tip #2: Limit your home improvements

Property tax is calculated on the value of your property (ad valorem tax).  Your locality assigns a value to your property (assessed value). The assessed value includes the value of your home but it also includes the value of structural improvements such as adding a pool, building a deck or adding a large shed on your land. By keeping these home improvements to a minimum, you will limit the increase of your property tax bill.

Tip #3: Apply for tax exemptions

Many states offer tax exemptions which lower your property tax bill. These includes: discount  for a main residence (homestead exemption), for veterans, for senior citizens, for people with disabilities, for agricultural purpose and even for paying your tax early! As a reminder, property tax is also deductible on your income tax return fully when you rent your property.

To read more on property tax deductions in Florida: http://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx

Tip #4: Review your bill for discrepancies

Your property tax is calculated on the characteristics of your property such as the square footage and any extra features. To ensure your property tax is correctly calculated, you will want to review your bill to make sure your home characteristics are accurately reflected. In addition, you may also want to check your bill against comparable homes in your neighborhood to make sure you are not overpaying. To do so, log on to your local property appraiser’s website and review your property listing for mistakes.

Bear in mind the date of this article as tax laws change over time

For assistance with your international tax needs, please contact Karine Bauer, EA, JD HERE.

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Updated December 7th 2023