Posted by: Daryl & Wendy Ashby | April 26, 2012

Clawing Back the Taxes

Do you have Investment Properties and need to pair back some of your overhead to see a profit at the end of the year?

Have you considered taking a serious look at the Assessed Value placed on your property and thereby reduce the property taxes you pay each year?

Most people find themselves intimidated by big government and feel they have no choice but to accept the hand they have been dealt, but this should not be the case. Having worked in Real Estate sales of 25 years, I’ve seen so many occasions when a property is clearly over assessed and the poor home owner has done nothing about it.

If you decide to venture into this arena, first of all you have to be absolutely convinced that, that value is inflated. Pay your local municipal office a visit and ask to look at the assessments for properties adjacent to yours or properties in the general area that reflect well on your home.  

If it does exceed the true value of your property, as an investor, you have to look at this as a business and you have to look at reducing every fixed cost you have, and appealing property taxes is one of them.

We have had clients who have fought city hall and won, clawing back as much as 20 per cent of their tax expenses by filling in the paperwork, if possible presenting an appraisal and digging in their heels.

There is definitely a benefit in challenging the assessment and I don’t think it’s the big arduous process that many make it out to be, although that is what keeps a lot of investors from launching a protest.

Municipalities across the country have in fact streamlined the process, moving much of it online along with an automated property evaluation process, which nonetheless produces the occasional error.

Most appraizers will acknowledge that assessing the value of small, aging apartment buildings is particularly challenging, suggesting investors in that segment of the market may be in an excellant position to beat city hall.

Regardless of your situation, don’t be too quick to accept your assessment as gosple, especially in a falling or soft market.

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