Are You Paying Too Much In Property Taxes?

Did you know that from 2007 to 2009, property values declined by 50 percent in the Atlanta metro area alone? Or, during that same period in Atlanta metro, home assessed values declined by 4 percent? According to a five part series in the Atlanta Journal Constitution, 7 out of 10 properties are over assessed. Tax assessment data is coming out over the next several months, and for many, it will be a nasty surprise. Ignoring the possibilities of over assessment could be costly.  Property taxes are calculated by using the “assessed valuation”, which represents 40 percent of “fair market value”. This number is then multiplied by the “millage rate”. Millage rate is a number calculated by the tax commissioner’s office, in conjunction with the annual budget per the County Commissioners.  The assessors do not determine the “millage rate”, as commonly believed.

When purchasing a property for rental, it is important to determine the tax assessor’s valuation. If it is low, chances are high that your property taxes will also be high. I recently spoke with an investor friend who discovered that the Property taxes on an anticipated rental property were unreasonably low.   The prior owner had been in the property for a number of years and had old age exemptions as well. My friend figured out that the taxes would go up over $200 per month. What a surprise my friend would have had if he had not done his research!

This can also work in reverse. For example, let’s look at a property that is overvalued for tax purposes’.  You may be able to get the value lowered, but this will reduce the property taxes. It is important, however, to make sure of your assumptions.

In some jurisdictions, property tax revenues have dropped substantially over the last several years. With reported foreclosures at staggering highs, and anticipated filings increasing, it is no wonder that many believe we have not reached the bottom price wise. Some folks are even predicting a further drop of between 10 and 20 percent!

There are companies that specialize in getting taxes lowered for property owners. These companies are either fee based, or in some cases will charge a percentage of the reduction. The Fulton County Taxpayers Federation holds seminars on how to do this. Remember, tax assessments are coming out soon. Watch for them and if you are being overcharged based on current market conditions, file an appeal, it could save you money.

Gordon Catts has a widely diversified real estate background. He has been involved in building, appraisal, title work, and brokerage, as well as training, mentoring and consulting. Gordon has trained thousands of real estate investors nationally, as well as locally in the Greater Atlanta area. Gordon is a long time member of several real estate groups and have been involved in the formation of several local associations.