January 2017 // Real Estate & Home Builders Guide // 9M
By Ilyce Glink
and Samuel J. Tamkin
Tribune Content Agency
Q
: Forty years ago I paid
$700 for my home. I never
upgraded the home and never
made any changes to it. Today
I pay more than $10,000 in real
estate taxes. I’m looking for tax
forms I can use to protest my
real estate taxes. Being on a fixed
income (all I get is social secu-
rity), I feel I am being punished
by having to pay those high taxes.
I want to die on this property, not
sell it and move.
WHAT TO DO WHEN
PROPERTY TAXES
ARE TOO HIGH?
A
: There’s no doubt that there
are inequities in the way we
deal with all of our taxes. If you
have a tax on consumer goods,
you can generally say that the
middle class or poor will pay a
greater percent of their annual
income toward sales taxes than
the wealthy. If you have an
income tax that has a higher
percentage for higher incomes,
you still get inequities in many
situations.
Our federal and state
governments need money to
build and maintain roads and
public infrastructure, to build and
run public schools and univer-
sities, public safety and other
governmental functions. In some
locations, you have to pay federal
income taxes, state income taxes,
municipal income taxes, state
sales taxes, real estate taxes and
many other fees.
But your point is that your
home has become unaffordable.
No doubt that your real estate
taxes are high, but we also don’t
know what your property is
worth. We’ve known of people
that purchased small seaside lots
with small cottages in Florida on
the Gulf for $10,000 some 30 or
so years ago and sold those same
lots for more than $1,000,000.
If property taxes are based on
property values, people like
you feel the pain when property
values increase.
Frequently, the largest amount
of money paid on property taxes
is for the local schools in a
community. When there are great
schools, property values go up
and real estate taxes follow.
What you can do is make sure
that your real estate tax bill is
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accurate. It is not uncommon
that the local taxing body may
have the wrong information
about your home. That inaccurate
information can lead to your real
estate taxes being much higher
than need be. We’d suggest you
call your local taxing office and
see if they will go over your tax
bill with you. Some offices have
times for homeowners to come in
and talk to a person that can help
them make sure their property tax
bills are correct and that they are
getting all the benefits afforded
to them.
Some states and counties have
provisions to help homeowners,
senior citizens, low income
homeowners, long-term residents,
etc. In some cases, taken as a
whole, these provisions can save
a low income, senior citizen
thousands of dollars off their
property taxes. Sometimes, tax
bills are frozen at the dollar
amount charged when you turned
a certain age, such as 62 or 65.
But if you don’t apply for the
real estate tax reductions, you
don’t get them. Whether your
property and you are entitled to
these reductions will depend on
what is available in your state,
county and local municipality.
We’d encourage you to look on
the internet and see what you
find. Frequently a quick search
for your city and property tax
exemptions may lead to informa-
tion that you can use.
Finally, there are real estate
tax professionals that make their
living contesting real estate tax
valuations for homeowners. In
some situations, they will contest
taxes on the basis of the savings
achieved for the homeowner.
If they get you a $1,000 tax
reduction, they may get 30 to 50
percent of that amount for the
first year.
You can check to make sure
the information the taxing body
has on your house is correct; you
should make sure you are taking
advantage of every benefit to
reduce your real estate taxes that
is available to you; and you can
contest the real estate taxes.
Since you don’t have a
mortgage, you can also check to
see if a reverse mortgage would
be a good option for you. Reverse
mortgages are available to
homeowners age 62 or older, who
either have little or no mortgage
and substantial equity. You would
get either a lump sum or could
annuitize the loan amount into
a monthly sum you receive for
the rest of your life. When you
die, the home would be sold to
pay back the loan. You would not
have to pay anything on the loan
as long as you live in the house
full-time, but would still have
to pay your property taxes and
insurance each year.
Finally, while it would be
wonderful for you to be able to
stay in your home for the rest of
your life, that may not be how it
works out. If you can’t get your
property taxes reduced, and
don’t wish to consider products
like a reverse mortgage, then
you should think carefully about
whether you’d be better off
selling and moving elsewhere.