Investor · Maryville, IL · Member since 2016 · 129 posts · 81 votes
I searched the site for some basic information on this, and didn't see much in the specific area of exemptions, and that might be because there really isn't any (sad face).
I do know the lot of you are much more intelligent than any search engine, so I put this out there for your wise counsel:
"Are there any exemptions or other tax credits that I can file with the county that would reduce my 'Net Taxable Value' on my investment properties (properties that I do not live in, have a mortgage for, and rent)?"
I appeal all my valuations with appraisals and or the HUD statement when I buy, and that usually helps for a year or so, then the county likes to get their money back as soon as possible (and typically, they do by jacking up the assessed value immediately).
I am looking for any options to keep my tax bill as low as possible and all help is appreciated.
If you find a way let me know. I don't know your state laws but many states have tax advantages for owner occupants. Without a doubt I pay a LOT more in taxes because I cannot get owner occupied tax savings. It seems states love (or hate) investors...my guess being they love the extra income to help support the system! I just got hit with 34K in tax bills...and it only gets worse every year.
If you find a way let me know. I don't know your state laws but many states have tax advantages for owner occupants. Without a doubt I pay a LOT more in taxes because I cannot get owner occupied tax savings. It seems states love (or hate) investors...my guess being they love the extra income to help support the system! I just got hit with 34K in tax bills...and it only gets worse every year.
The Home Owner Exemption is self-evident. To my knowledge, that's it and there's no exemption for non-owner occupied, vacation homes, SFR or MFU rentals.
Ok, I spoke to my county assessor and they say if I can get the tenant to sign an agreement to pay the taxes, there is a "general homestead exemtion for leasehold properties" option.
I cannot build it into my rental agreement so that I identify that they pay $xx for the rent and $xx of that is for taxes. They actually have to sign up with the assessor's office and agree to pay those taxes. I can reduce my rental charges for them in that amount if they'd agree to it, but if they fail to pay, then my property goes up for a tax sale unless I pay it, and they could just walk away, so...
I haven't put numbers on this, but it sounds very difficult and perhaps not worth the effort...
if anybody else has tried this, I'm curious how it worked out for you?
Ok, I spoke to my county assessor and they say if I can get the tenant to sign an agreement to pay the taxes, there is a "general homestead exemtion for leasehold properties" option.
I cannot build it into my rental agreement so that I identify that they pay $xx for the rent and $xx of that is for taxes. They actually have to sign up with the assessor's office and agree to pay those taxes. I can reduce my rental charges for them in that amount if they'd agree to it, but if they fail to pay, then my property goes up for a tax sale unless I pay it, and they could just walk away, so...
I haven't put numbers on this, but it sounds very difficult and perhaps not worth the effort...
if anybody else has tried this, I'm curious how it worked out for you?
I was going to tell you about that. I know the Granite City sub-chapter of the Metro East REIA just had a meeting on this last month and took the group through how it works. It can only be used for SFH. That gives you the $6,000 homestead exemption. In my case, my personal residence's taxes are reduced by $632/yr (based on my taxing districts). Most homes will see a reduction in property taxes by a similar amount.
I don't know how the owners actually get their people to follow through with it. Come to the January MEREIA and find out. I can try and hook you up with some of the people who use it.
@Ronald Perich - thank you. I think my final question on that would be, if they DON'T pay, would I be liable for the taxes with the exemption, or without? Because if it's with the exemption, then I'm pretty golden, because I don't think they wouldn't change the exemption during the year (ie prorate it). If I would be accountable for the taxes without the exemption if they didn't pay, then I'm sure the effort is not worth the risk.