Property taxes play a significant role in your escrow account balance, and in turn, impact your monthly mortgage payments. Along with increases in home insurance rates, homeowners face property tax increases that can impact their escrow accounts and finances. As local tax rates and property assessments fluctuate, your property tax liability can increase over time. However, there are strategies you can employ to minimize these increases and preserve your financial stability. By taking advantage of available exemptions, budgeting and planning, homeowners can look to maximize their savings and create a more affordable homeownership experience.
1. Monitor Tax Policy Changes
Staying informed about local tax policies and legislation is a crucial first step for homeowners seeking to minimize property tax increases. Changes in tax rates or exemptions may impact your escrow account, so regularly reviewing tax-related news for your area and consulting with local tax professionals can help you understand what’s coming and adapt your financial plans accordingly.
2. Appeal Property Assessments
Property assessments serve as the basis for calculating property taxes. If you believe your property has been over-assessed, you have the right to appeal the assessment. An appeal can help ensure your property is accurately valued, potentially resulting in a lower tax liability and a more stable escrow account. If you’re interested in reviewing property tax history and the potential for appeals, you can consult with a real estate professional and use an estimated home value tool like the one offered through our real estate brokerage. Along with reviewing your own home’s value and taxes, take a look at comparable houses in the area to see if the taxing history is comparable.3. Disability Tax Exemptions
For Veterans with disabilities, exploring Veteran disability tax exemptions can provide substantial savings. These exemptions may be available on federal and state levels, but they generally reduce property taxes for eligible Veterans based on their disability rating. By researching and applying for these exemptions, Veteran homeowners can significantly reduce their property tax burden.4. Homesteading
Homesteading is another strategy homeowners can leverage. Homestead exemptions have a variety of requirements and vary by state, but they protect a portion of a property's value from being taxed, typically offering a fixed dollar amount or a percentage reduction in assessed value. Applying for a homestead exemption can lead to savings that help ensure property tax increases remain manageable. Check with your county assessor for information and eligibility criteria.
Property tax increases can pose challenges to homeowners, but you can minimize their impact on your escrow account (and potentially find savings) by understanding these strategies and leveraging the exemptions that may be available to you. By doing so, you can create a more affordable homeownership experience and better maintain financial stability.
Remember, our dedicated Homeownership Concierge team is here to assist you with any questions or concerns you may have. If you’re interested in speaking to our Homeownership Concierge, you can contact them at 800-202-8934, or submit an inquiry here.