Property Tax Reduction 101: What is it And How Does it Work?

Just like other types of taxes, property tax (also known as millage rate) is used by the government to fund different kinds of public services, from law enforcement and public education to roadwork and supplying the salary of government employees. Without taxes, the government, from federal and state to county and city, will have no means of providing these services, nor be able to retain essential government employees like police, firefighters, judges, and so on.

But as necessary as property tax is, you should also be aware that not all types of property are taxable. To determine this, you need to hire a professional to assess your property to figure out the extent of your non-taxable property.

How Property Taxes Work

The first step to reducing your property taxes is to assess how much of your property can be taxable. Bear in mind, however, that different types of properties in different parts of the city or in different counties will follow different types of tax laws: residents in Suffolk county might have different taxes in, say, Nassau County. Property Tax reduction services in either of these counties, however, should be up-to-date with their respective areas’ tax laws.

Property Tax reduction services will usually inspect all the factors that govern property tax, which include the total size of your land plus any structures that might influence your tax rates (i.e., commercial structures, barns, etc.). Land that has access to public services like gas, water, or sewage, will usually have higher tax rates than properties that don’t have access. Properties that also have the potential for commercial development might be assessed higher, which can lead to higher property taxes.

There are multiple ways for property owners to claim exemptions, however. Exemptions like the Homestead Exemption protects the value of homes from property taxes and creditors if and when the homeowner declares bankruptcy. Senior homeowners can also be exempted from property taxes. Agricultural properties can also seek for full or partial exemptions based on how large the property is, what type of agriculture they engage in, and how profitable their operation is.

Veterans and persons with disabilities can also enjoy full or partial exemptions depending on the municipality and the extent of their eligibility. Some residents of New York State are also eligible for a STAR exemption, or the School Tax Relief Program, which aims to reduce school district property taxes for people who primarily reside in the state.

What If I’m Paying Too Much Property Tax?

If you get yourself assessed by a private property tax reduction service and find that their assessment is lower than the government assessment, then you’re eligible to file a grievance.

Once you file your grievance, the government will send an independent assessor to your property to verify whether or not the findings of both the government and your private property tax reduction services are correct. If they rule in favor of the government, your appeal for tax reduction will be denied. However, should they find your property tax reduction services findings as accurate, then the government will have to grant you exemptions.