Retiring on a literal shoestring: support group (Washington, Maine, Maryland)

[Tesaje]

Originally Posted by newenglandgirl

As a semi retiree I continue to worry about property taxes---subject of the day: how to appeal a house assessment. I know I will be facing that in the near future. Has anyone successfully done this and how???

I did quite a few years ago. You need to go to your jurisdiction's web page for the assessor's office to see what their process is. Where I am, they had a form. At the time, and why I appealed, house prices were selling in my neighborhood for $20-30k lower than I paid for my house and the recent assessment had my house price some $15k higher than I paid. I filled out the form and protested citing the recent house sales, the house address and selling price. I noted what my house did and did not have compared to what the other houses had or did not have.

They simply sent me a letter later with the assessment at a much lower value that was more reasonable than before and in keeping with the market. They cited a couple of nice things my house has that the others did not. I was amazed at easy it was and I did not have to do anything else or fight them in any way.

My county has time limits for when I may dispute an assessment. I missed this year's tax protest season and the next assessment is scheduled for the end of this year.

The key is to find out how your jurisdiction does things and what their rules are. Property tax assessment is a very local thing.

[wabanaki]

I think the property taxes are important subject, before i retire, i was search for area that have low tax rate, even thou it is NOT the first priority but come close to it. I found the area that fit my criteria and tax rate is half of where i was.
bought a piece of land and build a small house for about 150k, now the county assess house for tax purpose at 247k plus land value(110k), No i have not appeal to the assessor yet, i don't know how to do it yet. we build in new a community most people build their house double or triple our house cost.
some time tax rate not tell you every things, i notice certain town may have high tax rate but they only applied to certain percentage of the assessment, in our case is 100% of the assessment value.

Originally Posted by newenglandgirl

As a semi retiree I continue to worry about property taxes---subject of the day: how to appeal a house assessment. I know I will be facing that in the near future. Has anyone successfully done this and how???

[StealthRabbit]

Originally Posted by wabanaki

...
bought a piece of land and build a small house for about 150k, now the county assess house for tax purpose at 247k plus land value(110k), No i have not appeal to the assessor yet, i don't know how to do it yet. we build in new a community most people build their house double or triple our house cost.
some time tax rate not tell you every things, i notice certain town may have high tax rate but they only applied to certain percentage of the assessment, in our case is 100% of the assessment value.

btdt... I built a cheap home ($112k) on cheap lot ($22k) in area where folks were building higher value joints. Big back fire to me... (we have 100% valuation assessments also) my prop taxes have gone from $800 / yr to $12,000 / yr in 13 yrs, doubling in 2007 alone.

I contested assessments several times, nominal effect for homeowners, dramatic effect as owner of investment properties (you can use other valuation methods, such as cap rates and income / economic stress / redevelopment areas...)

For the home owner in my state;
1st talk to the assessor (very nicely) and get them to drop it without a hearing (this is best procedure, but only for minor value drops, / mistakes in assessment). this first step is critically important and a good indication of your potential success if you have to go the 'legal route'

then follow the legal procedures...
Assessor is considered correct and you must PROVE them wrong (as in a defense court case). We do this through a county board of equalization, and then potentially a state appeal. The process is very involved and you must be well prepared and should pay a professional to represent you (an appraiser of sorts, but specifically one who does this for a living.) They want a TON of $$ as they need to prepare a lot. The commercial clients pay them 10% of tax savings, which can be significant. Residential clients don't have a prayer of saving enough to make it worth the professional's services. (example... With several weeks of data collection and presentation prep, I was dropped ~ $20k in valuation, which was peanuts in tax savings.) After the tape recording was stopped (at the hearing), the assessor said, "don't worry, we'll get you next year and beyond." And thus they did... I have tracked my subsequent assessments, and found that mine have increased ~ 28% where 42 of my neighbors increased 0-6%, thus I have been beaten into submission and am now trying to sell, but who wants to buy a home that costs $33/day for taxes. (It is a significant barrier to selling). A taxing district that is 1/2 the burden of mine is less than 1/4 mile away, and lots of vacant land and homes there. (but yet I am not allowed to use that criteria OR comparables from that district in my tax fight)

Bottom line... if you are in a greedy spot (high taxes, ez voter sentiment, blackmailing fire, rescue, libraries, or school districts; aggressive (but not profitable) port districts, under serviced police and utility districts...) then move QUICKLY.

Find an area that is well served and not targeting growth / expansion and is not already 'bigger-than-their-britches' A State and County with solid funding would be a good start. (Wyoming and the Dakotas come to mind)

Do be sure to fully understand your assessment and valuation process, (Hint: Spend a few hours with your assessor up front).

Many folks are complaining about the falling resale value, but their assessment keeps climbing. Our assessor will just laugh saying "Don't you know we value based on January of the Previous Year ?, and physical inspections of the July preceding that?" Assessments are not going down, and when they do, the Mill Levy will just increase to equal the previous revenue from the new, but lower values. As an individual you WILL NOT win this battle, my assessor just says "sell it to someone who can afford it !"

[Windwalker2]

Originally Posted by StealthRabbit

Many folks are complaining about the falling resale value, but their assessment keeps climbing. Our assessor will just laugh saying "Don't you know we value based on January of the Previous Year ?, and physical inspections of the July preceding that?" Assessments are not going down, and when they do, the Mill Levy will just increase to equal the previous revenue from the new, but lower values. As an individual you WILL NOT win this battle, my assessor just says "sell it to someone who can afford it !"

We have this problem too. Also the county needs money and will get more by overassessing the whole community. They probably aren't getting anything from all the foreclosures.

How exactly can we determine whether a place we might move to will not have this problem, or the risk of it?

[StealthRabbit]

Originally Posted by Windwalker2

...
How exactly can we determine whether a place we might move to will not have this problem, or the risk of it?

Via doing an 'informed' evaluation;

1) history of spending and tax levies
2) absence of voter approved levies (You want as few as possible)
3) current funding sources, and projections for future support (i.e., some nearby counties are living on 60% 'timber subsidies', that is 'short term' revenues) the following are BAD according to my perception;
a) coal / oil energy $$ dependence could be VERY BAD if Cap and Trade passes
b) too much dependence on one particular industry for revenue is BAD (i.e. Detroit)
c) excessive revenues from growth (permit fees, sales tax on real estate, impact fees)
4) viability of current county and state budget
5) talk to business owners, county, and school officials, real estate appraisers. If folks are whining, flee!
6) Term limits on commissioners and taxing authority leadership
7) succession plans (commissioners that turn into developers or land use attorneys is a very bad sign)

after thought... I usually support owning income producing properties rather than having too much equity in your primary residence, I am more adamant to pursue that path in the economy going forward, as LC mentions below... It may be better to rent. If you buy the correct income property, it will cash flow enough to keep you renting a place that you desire. You will be passing along your property taxes to your own renters.

[livecontent]

I did appeal my house assessment a few years ago. I got it reduced to the correct level. It did not rise after the two years (assessments are done every two years).

It is easy today with the internet because you have all the information about the value of the homes that are sold in your area. Today we can take cheap,multiple quick, electronic pictures which will help tremendously. It just requires research, a little work and patience. The assessor office was very cooperative. Most importantly: Be Polite.

My house assessment has recently dropped, substantially, due to the market downturn. It was done automatically and it all seems to me as a correct assessment. For me, it is better as it will lower my tax. Since I do not have any mortgages on the house and I bought it many years ago, I do not have financial problem from the value drop.

You want to pay less tax on your home. Live in a home that meets your needs but is not too big and expensive. Downsize if you must, especially after you get rid of the children. Become familiar with all the tax breaks for the elderly, disabled, veterans etc. and apply. Do not make the assumption that owning a home is the only way of living. Today, renting may be a better option, especially as you age and there are multiple options for care that you may need and will need.

I live in Colorado and my home is a small ranch which has not increased that much in taxes in the 23 years, that I lived in this house. I do agree with the prior post about all the issues that go into taxes. However, for most of us, it is complicated and we really just buy a home where we need to live. Also, much is based on speculations and past performance of the municipality. That is not an assurance that taxes cannot rise, excessively. People talk about the cheap taxes in Colorado but as time goes by, we may be facing the same tax burden as my birth state of New York. Colorado will hire more public employees for growth; pays them more benefits; guarantees large pensions and the next thing we know, Colorado is the "New" New York.

Livecontent

[newenglandgirl]

Originally Posted by livecontent

You want to pay less tax on your home. Live in a home that meets your needs but is not too big and expensive. Downsize if you must, especially after you get rid of the children. Become familiar with all the tax breaks for the elderly, disabled, veterans etc. and apply. Do not make the assumption that owning a home is the only way of living. Today, renting may be a better option, especially as you age and there are multiple options for care that you may need and will need.

I live in Colorado and my home is a small ranch which has not increased that much in taxes in the 23 years, that I lived in this house. I do agree with the prior post about all the issues that go into taxes. However, for most of us, it is complicated and we really just buy a home where we need to live. Also, much is based on speculations and past performance of the municipality. That is not an assurance that taxes cannot rise, excessively. People talk about the cheap taxes in Colorado but as time goes by, we may be facing the same tax burden as my birth state of New York. Colorado will hire more public employees for growth; pays them more benefits; guarantees large pensions and the next thing we know, Colorado is the "New" New York. Livecontent

I don't know about other areas of the country but right now our state is "OUT" of money and the good citizens of the more upscale areas are touting YES OVERRIDE! on their front lawns. They are not aware of what taxes are like in NY state, NH, and areas of the PNW. The schools are crying for more and more money. Here it's over 60% of the town budget!!! They want their raises, etc even though others like police are getting the shaft. I'm all for schools, but the school band didn't march in the town parade, and we don't need a parade, we need basic services that keep our community safe. They schools CAN do with less, they just don't want to lower their standards of "must-haves." But the homeowner on a fixed income cannot bear annual rises in taxes forever...when will it end? When older folks are forced out of their homes b/c the well heeled in town can afford more and more?

[livecontent]

newenglandgirl,

I really do not worry about the taxes. It is just there, just like the weather. I just have so many other concerns to handle, and taxes is not on the list. WHY??? well, I stumbled into a way to get away from many taxes---that is:

Do not make much money that is taxed, and Buy less that is also taxed

When you make less, you will buy less
When you buy less, you will have less
When you have less, you will need less
When you need less, you will buy less
When you will buy less, you will make less...

A simple life is all I want. I am trying to minimize my wants and needs to maximize my freedom from wants and needs.

Livecontent

[wabanaki]

I would love to make $1,000,000 and pay $600,000 taxes, but i am not comfortable with SS check of 14,900 and cost of living adjusting could not keep up with property taxes in crease.
I agreed with you on "buy less,you will have less", and i do practicing that more you have more you have to spend time and money to take care them.

Originally Posted by livecontent

newenglandgirl,

I really do not worry about the taxes. It is just there, just like the weather. I just have so many other concerns to handle, and taxes is not on the list. WHY??? well, I stumbled into a way to get away from many taxes---that is:

Do not make much money that is taxed, and Buy less that is also taxed

When you make less, you will buy less
When you buy less, you will have less
When you have less, you will need less
When you need less, you will buy less
When you will buy less, you will make less...

A simple life is all I want. I am trying to minimize my wants and needs to maximize my freedom from wants and needs.

Livecontent

[Tesaje]

Originally Posted by livecontent

newenglandgirl,

I really do not worry about the taxes. It is just there, just like the weather. I just have so many other concerns to handle, and taxes is not on the list. WHY??? well, I stumbled into a way to get away from many taxes---that is:

Do not make much money that is taxed, and Buy less that is also taxed

When you make less, you will buy less
When you buy less, you will have less
When you have less, you will need less
When you need less, you will buy less
When you will buy less, you will make less...

A simple life is all I want. I am trying to minimize my wants and needs to maximize my freedom from wants and needs.

Livecontent

Yes, nice idea ... but when your home of many years is now assessed at a much higher valuation and the taxes go up commensurately, what was once a modest, simple home becomes too high to bear the cost of taxation. Property tax on homes is a regressive tax. It is taxed based on a theoretical value independent of the taxpayer's ability to pay those taxes. People who have homes in a low tax state really cannot comprehend or compare their own situation to those who are in a high property tax states.

SR's story really smacks of graft and corruption in the jurisdiction he/she lives in. It seems that place is ripe for a taxpayer revolt. To SR's list, I would add it is important to find jurisdictions that tax from varied sources and look for ways to get their revenue in progressive ways rather than regressive. That way, your tax is tied to your actual income rather than a static non-income producing item like your home. It looks like all the jurisdictions that don't tax income have very regressive taxes that can literally tax you right out of your home. The lop-sided tax structures just mean they have to gfind other ways to get tax from you. At least income tax can never be more than a certain percentage of my actual income. Property tax can grow to be more than I have coming in.

From time to time, massive taxpayer protests have made local jurisdictions clean up their act. Sob stories of people having to leave their homes and not being able to sell because of high and unfair taxes make the commissioners and other elected officials start scrambling. But it takes a lot of people to get angry to make any impact. A single homeowner can't do anything.