How to Lower Your Property Taxes
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Categories: Homes Planning Property Management Real Estate
Published 04/07/2021
Property taxes provide funds for schools, roads, and many other vital aspects of our community. However, that doesn't mean you should be paying more than you have to. If you're a veteran, disabled, over 65, or under certain income thresholds, you may qualify for a property tax exemption. Here are some other ways to lower your taxes:
Homestead Exemption
Your primary residence may qualify for a homestead exemption, which will lower your home's assessed value for tax purposes. Which will reduce how much you owe in property taxes.
Appeals
In California, the State Board of Equalization (BOE) oversees the local county assessor's offices that determine the property taxes in their area. Although each county has its method, property taxes are generally determined by this formula: (Taxable Value of Home) x (Applicable Tax Rate) = Homeowner's Property Tax Amount.
If your property value seems higher than it should be on your property tax assessment, you can file an appeal. If you're successful, your property will get adjusted to a lower level, and how much you owe will be adjusted accordingly. However, this method could backfire if your home is worth more than the original estimate.
Renovations & Energy Incentives
If you have an older home or historic home, you may qualify for tax breaks for repairs or improvements. Which is on a home-by-home basis, and you may need to apply before your work begins. You can also look at improvements that make your home more energy-efficient; such home improvements may qualify for tax breaks. Speaking of tax breaks:
Take Advantage of Tax Breaks
Some homeowners cannot reduce the taxable value of their property through the appeals process — however, there are other options to reduce property taxes. Under the state constitution, there are various tax programs available. Some of the most popular include:
- Homeowner's Exemption: If a home is the principal place of residence for the homeowner. They may receive a $7,000 reduction in the taxable value of the property. To receive this exemption, claim form BOE-266, Claim for Homeowner's Property Tax Exemption, must be filed with the county assessor where the location of the property is.
- Veteran's Exemption: Qualified veterans who own real property valued at $5,000 or less (if single), or $10,000 or less (if married), may receive an exemption of up to $4,000. Claim form BOE-261, Claim for Veteran's Exemption, must be filed annually.
- Disabled Veteran's Exemption: Qualified veterans who are 100% disabled due to a service-related injury or disease, as well as the unmarried surviving spouse of a qualified disabled veteran, may be eligible for either the basic or low-income Disabled Veterans Exemption. The basic exemption is available regardless of income level and is compounded annually by an inflation factor. The low-income exemption is only available to those whose annual income does not exceed the specified threshold, which was most recently $62,614. For 2019, the exemption amount was $139,437 for basic and $209,156 for low-income.
- Proposition 60/90: California residents over the age of 55 who sell their principal dwelling, and purchase a replacement home of equal or lesser value within two years, may transfer the previous home's base year value to the new home as long as the county authorizes the transfer. To learn more about Proposition 60/90 eligibility, follow this link.
- A decline in Value: Under Proposition 8, California homeowners who suffer a decline in value due to a dramatic drop in the real estate market or a disaster (storms, wildfires, earthquakes, etc.) may receive a temporary reduction in the assessed value of their homes. That is known as the "decline-in-value" status.
If you have any questions regarding property taxes or would like to discuss this further with an expert, award-winning Realtor, contact Darryl Glass today at (510) 500-7531 or email dglass@adventpropertiesinc.com.