Property Tax Advice to a Friend
- As a new property owner or investor, you want to do everything you can to keep your cost of ownership as low as possible. One important cost is the local property tax. As a former city assessor and practicing property assessment consultant, I advise property owners to:
-- Be sure that the local assessment office is sending the annual assessment notice to your current mailing address and not to the mortgage company or lender. Although your bank or mortgage company may have set up an escrow account to pay the real estate taxes, as the owner you should be receiving the assessment notice.
-- Find out the statute of limitations for the correction of errors found in assessment records. Typically, state tax laws allow the local assessor to correct for certain qualifying errors up to a specific period of time. For example, in Virginia, an assessor can correct the current and three prior year assessments when a factual error is found. Be sure that you thoroughly check the characteristics of your property against the assessor's records before this deadline expires. Finding out too late that extra features or additional building area was included on your assessment record for the last 10 years could be very disappointing if only the current and three prior years can be corrected.
-- Check the local assessor's website or contact his or her office about important dates and deadlines that include: (a) the effective date for the valuation of your property for assessment purposes each year, (b) deadlines for filing to have the current assessment reviewed or appealed, and (c) deadlines for filing any required forms related to newly constructed buildings, the rehabilitation of existing properties, statements of income and expenses for income-producing properties, or the retention of tax abatements or exemptions.
This is the initial property tax advice I would give to a friend who has just purchased a home or has invested in commercial real estate. For more useful advice sign up for our Commerical Real Estate newslettter that is sent by e-mail once a month. By signing up you will receive our most recent subscriber-only publication and be able to download many of our previously released publications at no cost.
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