It’s Property Tax Time
The most common thing I hear is people complaining about how much their taxes went up and asking how to get them reduced. Unfortunately for 2021, it’s a little late to appeal your assessment. Although, if you feel your house is over assessed you could be paying too much property tax. The time to appeal your assessment would be the end of April and into May after updated assessments are released. If you have questions about your valuation, we are always happy to provide a comparative market analysis to tell you what we think it’s worth. If we provide market data that supports a lower than value than your assessment, there’s a chance you could convince the assessor to lower your assessment thus lowering your future tax bills.
Another common question is how do I pay my taxes? Some homeowners escrow, which means with each mortgage payment a portion is getting set aside for taxes. There are several options with this – You may have opted to have your lender pay your taxes directly or you may have opted to have the lender send you a check which then needs to be paid to the municipality. If you do not escrow for taxes this means you are paying the entire bill out of your pocket. If you are unsure which option you have, check with your lender.
When should you pay your taxes? Real estate taxes are deductible in the year that they were paid – so it can make a difference if you pay them in January or December. Some people will want to try to pay 2 years of property taxes in the same year (Jan and then Dec), so you are able to itemize one year and take the standard deduction the next. This is probably worth reviewing this with an accountant or tax advisor.
Another timing factor to be aware of: Your bill that comes this December is actually for this year’s taxes. I’ve run into several sellers who thought the December bill was for the following year. Most municipalities (Madison, Verona, Middleton, etc) allow payments in multiple installments. These can have you paying off your 2021 taxes in July of 2022 for example. I’ve had a few sellers in July that thought they were paid ahead in taxes and shouldn’t have to pro-rate additional taxes at closing. I have to break the bad news that they just paid off last year and they owe 7 more months’ worth of property taxes at closing.
While we are all annoyed with paying taxes of any sort, our property taxes do help fund the County and City governments as well as the local school systems and technical colleges. Our property taxes here in Wisconsin are high, but it comes with better school systems than most of the country. Of course, we’d always like for our tax dollars to be used as efficiently as possible, but taxes are just part of life and home ownership.