Saving thousands $ in property taxes

6 Replies

Hey everyone,

If you're able to purchase properties well below the appraised tax level, I highly recommend appealing to the county to have your property taxes lowered.  It doesn't require much effort although it's a slow moving process.

Here's what I did:

Between January and April of each year, I'd check to see to what the tax value of any homes I purchased from the prior year on the county website (here's the link for Cuyahoga county): https://myplace.cuyahogacounty.us/

If I was able to buy a house from the prior year for a meaningful amount less I'd submit an appeal to lower the property taxes.  A ballpark way to estimate this is if the county values the property at $100K and you purchased it for $50K and your tax bill is $2K for the year, if you successfully challenge it will decrease the tax bill by $1K (50%)  

Here's the link to the Cuyahoga County board of revision to submit change requests: 

https://bor.cuyahogacounty.us/en-US/complaints-search.aspx

Sometime in the following months you get an appointment to appear at the office.  Your purchase contract is the most relevant documentation to prove the real value of the home.  I presented that during the hearing and it was a very straightforward process.  My hearings were in August after submitting the revision request in March.

I even did these appeals for flips that I no longer owned.  I just had to notify them that I'd like the check mailed to me as opposed to the current home owner.  This was especially helpful in high tax cities like Shaker Heights and Cleveland Heights.

The county does an appraisal every few years so even though my rentals will have their values readjusted in the next 3 years, at least in the interim I've been able to save a few hundred dollars a year per property through reduced property taxes.

Hopefully this is helpful and am interested in hearing any other tips others might have.

Does this effect the appraisal values?  I believe you mentioned that it did, but if you can save money on taxes and if you went to refi and it still appraises for the $100k...that's a win win.

Hi Gary, to clarify - counties (at least in Cleveland) has some scheduled appraisal process where every 3 years or so they reevaluate the tax values of each home.  This is independent of what banks would do if you're getting the property financed. 

For example. In year 1 I buy a house and fix it up.  I can get the taxes lowered  (temporarily at least) for 2 years before the next appraisal.  After the next appraisal I'd have a harder time justifying the low home value since I had purchased the home 3 years prior and had  also fixed it up.  But if you challenge the taxes the year after you buy it, the county just relies on the purchase price, not how much money you've spent fixing it up.  This is the case at least for Cleveland.  I'm sure other counties are different so you'd want to check your counties building department to see what they  want to have during the board of revision process.

But yes, you can fix it up so that you can show the banks that it should appraise high while showing the county that it should appraise low for tax purposes.

Originally posted by @Gary C Jones :

Does this effect the appraisal values?  I believe you mentioned that it did, but if you can save money on taxes and if you went to refi and it still appraises for the $100k...that's a win win.

 

You can only claim the back taxes on Flips for the time that you owned the property and paid taxes on. 

I had a previous seller claim taxes on a property I owned and paid taxes on. City went after him and then paid me the refund.