Lowering the tax liability on your Salt Lake City rental property is absolutely worth the effort if you get the opportunity. Regardless if you are new to rental property investment or a seasoned pro, analyzing your Salt Lake City property value assessment to determine whether it’s correct is time well spent.
At Real Property Management Wasatch, we advise all of our landlords to take the time to do this because you could discover that your assessment is too high, which once re-evaluated can lead to fewer property taxes. There are several ways to determine whether your current property assessment is correct.
How a Property Should be Assessed
Properties are typically assessed yearly by a town or city’s assessor. In a lot of cases, the assessor reviews the current status of your property and any improvements performed and the current market conditions for similar homes in your area, and then they multiply that by the area’s level of assessment as determined by the municipality. If you have a multi-family building, the assessor will include in the valuation the income earned from the property over the past year minus maintenance costs. The cost of replacing the home is also considered in determining its assessment.
If you look at your annual property tax bill and nearly collapse from shock at the figures, take some deep breaths and then wisely consider the options you have to lessen the tax bill. One thing to remember, however, is that there is a deadline to dispute the assessment. Most municipalities will offer you 30 to 60 days after you receive the assessment to challenge it.
How to Understand an Assessment
Look at what the assessment states about your property. You could find that you’ve suddenly become the owner of Salt Lake City property that is nothing like the one you actually own. For example, the assessment might incorrectly give your house four bedrooms when it only has three, or place your address in an upscale neighborhood adjacent to your actual location. In one case, a homeowner’s one-story home with vaulted ceilings was wrongly listed as a two-story house and charged double the actual square footage because the assessor viewed it from outside rather than doing a more exhaustive inspection.
The value of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you might be able to learn from their assessment. Otherwise, it’s a good idea to compare your property with four or five in your general vicinity that have the same amount of square footage and the same property size.
Look into Exemptions
While taking the time to make sure the valuation of the property is right, also investigate whether you’re receiving any exemptions to which you qualify. Some states and many municipalities give breaks to owners who are senior citizens or veterans, homes located in specific areas, and several other exemptions. Your local tax assessor might be able to help you find any tax breaks to which you’re qualified.
If the first tax bill after you purchased your property shows that its tax assessment value increased by almost 50 percent in one year, as what happened to an owner in Georgia, you’ll want to request for a review to help you understand any changes. Most tax assessors are willing to informally explain your assessment. If you’re not content with the informal explanation, you can file a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments considerably.
When you work with Real Property Management Wasatch, we help you get the most out of your property and navigate it to success. To learn more about the services we offer, contact us online or call us at 801-418-9835 today.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.