5 Ways to Save Money on Your Property Tax

The property tax that you pay on your residence can range from minimal (Hawaii and Alabama) to painful (nearly all of New England and New Jersey).  We are fortunate in our state that property tax is quite reasonable (we pay around $1200 a year on a $240,000 house).  Meanwhile when we were looking at property in Connecticut, a $250,000 house had an annual property tax bill of $6400!!!  Here are five ways to save money on your residential property tax:

1. Buy a home in a lower property tax area (as shown above, in some areas monthly property tax payments can equal or surpass your monthly mortgage payment!).
2. See if you qualify for any property tax exemptions programs (in our area we qualify for a veterans discount, other areas offer exemptions for disabled or elderly people).
3. Appeal your property tax bill at the assessor's office if you feel it is incorrect.
4. See if the area you are buying in is subject to a property tax cap (in our area there is a property tax cap of 3% per year which is good as home prices have more than doubled since we bought our property here, without a cap we would be paying more in taxes).
5. Work with your tax adviser to get the best deal on real property taxes you have paid (there are lots of rules about deductability of real property tax, writing off part of your house as a business deduction, etc).