Reducing the tax liability on your Dunnellon rental property is definitely worth the effort if you have the opportunity. Regardless if you are new to investing in rental property or an experienced pro, studying your Dunnellon property value assessment to determine its accuracy is time well spent.
At Real Property Management Diversified, we recommend all of our landlords to take the time to do this because they might discover that the assessment is too high, which once re-evaluated can lead to reduced property taxes. There are numerous ways to determine whether your current property assessment is correct.
How a Property Should be Assessed
Properties are typically assessed yearly by a town or city’s assessor. In most cases, the assessor examines the current status of your property and any improvements done and the current market conditions for similar homes in your area, and then they multiply that by the location’s level of assessment as determined by the municipality. If you have a multi-family building, the assessor will include the income received from the property over the past year minus maintenance costs in the valuation. The cost of replacing the home is also considered in determining its assessment.
If you open your yearly property tax bill and nearly collapse from shock at the figures, take a couple of deep breaths and then carefully think of the options you have to lower the tax bill. One thing to keep in mind, however, is that you’ll have a deadline to dispute the assessment. Most municipalities will give you 30 to 60 days after receiving the assessment to challenge it.
How to Understand an Assessment
Look at what the assessment states about your property. You may find that you’ve suddenly become the owner of Dunnellon property that is nothing like the one you actually own. For example, the assessment could mistakenly give your house four bedrooms when it only has three, or place your address in an upscale neighborhood close to your real location. In one case, a homeowner’s one-story home with vaulted ceilings was incorrectly listed as a two-story house and charged twice the actual square footage because the assessor viewed it from outside rather than doing a more thorough inspection.
The value of similar properties in your area can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you may be able to learn from their assessment. Otherwise, it’s practical to compare your property with four or five in your general location that have the same amount of square footage and the same property size.
Look into Exemptions
While you’re taking the time to ensure the valuation of the property is correct, also check whether you’re receiving any exemptions to which you’re entitled. Certain states and many municipalities offer breaks to a senior citizen or veterans, homes located in certain areas, and various other exemptions. Your local tax assessor could help you find any tax breaks to which you’re entitled.
If the first tax bill after you purchased your property shows that its tax assessment value increased by almost 50 percent in one year, as what happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Most tax assessors are willing to unofficially explain your assessment. If you’re not happy with the unofficial explanation, you can make a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments considerably.