Property tax increases can be a shock to every homeowner's budget, especially if you are already living paycheck to paycheck. Understanding how to plan for property tax increases is not only important but also necessary for smart financial management. With these tips, you can prepare for a hike in your annual property taxes and avoid any potential financial setbacks.
Review Your Property Tax Assessment
To plan for property tax increases, you must first understand how your local government calculates taxes using your property's assessed value. Check your property tax assessment thoroughly and ensure that it has no mistakes or overvaluation. You can prepare your upcoming tax payments once you verify your review is correct. Understanding the assessed value of your property can also help you decide to protest your assessment if it is too high.
Estimate Future Tax Increases
It is best to prepare for tax hikes by estimating the potential increases in your property taxes in the coming years. Check with your municipality's assessment department and review their assessment trends. Homeowners can also look at historical tax rates in their area to estimate potential year-over-year rate increases.
Plan For Tax Payment
It is a good idea to save money on a regular basis to prepare for future tax assessments. Homeowners can choose to pay property taxes on a quarterly or biannual basis instead of once a year. Moreover, some municipalities may offer discounts or senior citizen rate relief for early tax payments.
Use Your Tax Escrow Account
Most mortgage lenders require homeowners to open an escrow account to pay their property taxes and insurance. Homeowners can use this account to prepare for property tax increases. If you think your assessment will increase in the coming years, you can speak to your lender and make a one-time lump sum deposit into your escrow account. It will help you avoid any potential shock when the tax bill arrives, and you can budget your savings accordingly.
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If you want to reduce your property taxes, we’re here to help! Based in Plainview, New York, Home Tax Saver specializes in minimizing clients’ property tax assessments with personalized service. Our number one priority is customer satisfaction.