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April 2nd, 2010
11:29 AM ET

Are You Paying Excessive Property Taxes?

Imagine paying $1,400 in property taxes. Not too bad? Now imagine overpaying by $1,400. Feel differently? Unfortunately, this is a real situation for many families in many cities across the nation. Citizens overpaying property taxes has become an epidemic, of sorts, for which there could be many contributing factors. For one, as property values decrease, the property value may still be recorded by the County Tax Assessor at the higher value. This creates a discrepancy in what should be paid versus what is actually paid. One may ask, why are homes losing their value? One of the largest influences in property value decreases are neighboring home foreclosures. Fair or not, when homes in your neighborhood foreclose, your property value decreases, and so should the amount of taxes you pay on that property.

The discrepancy issue arises when County Tax Assessors do not include foreclosed properties within the same neighborhood, often next door to the subject property, because they haven't been required to do so. Many homeowners do not appeal the assessed values provided by the county, so the county receives more than it should in property taxes. Now consider for a moment that most of the people paying property tax overages live in some of the hardest hit areas due to foreclosures, which also happens to be some of the lowest tax brackets. In other words, most of the people paying tax overages, are the ones that can least afford to do so.

Based on a recent report published by one of Atlanta's largest non-profit housing policy advocates, Atlanta Neighborhood Development Partnership, 5 counties within the Atlanta Metro Area collected about 86 million dollars in overages last year. If a portion of that 86 million was yours, wouldn't you want it back? Of course you would. The last thing you would want to see is your hard earned dollars flying out of the window. In this case, they are flying out of the window and into the county's pockets. I know this sounds bad, but let's flip the coin for just a moment.

Counties all across the country find themselves in the same position as many American citizens–struggling, with many filing bankruptcy and others not far behind. If we remove the county's ability to receive these unfair overages, more of them would be filing bankruptcy sooner. This illuminates another issue. As I mentioned earlier, most of the citizens paying overages, are the least likely to be able to do it. So the downtrodden, are funding the government's inefficiencies, dishonesty, and haphazard operations. Consider that. The financially unfortunate are keeping the county afloat. While this is not a pretty picture, the counties alone do not hold the blame. As citizens, we have a responsibility to be educated on how to take care of the biggest asset most Americans will ever own, our homes. We should not take for granted that our local government has our "best" interest in mind because we are all human and make mistakes, however costly or inconvenient they may be.

Though none of us are perfect, the government has taken an important step to fix the problem. Fortunately, Senate Bill 55 passed last year. Among other things, this bill requires Tax Assessors to use foreclosures in the analysis of their properties. This allows for more accurate assessments based on fair market value, rather than the inflated prices caused by the housing boom, which was responsible for most of the problematic foreclosures in the first place. As properties are assessed more fairly in the future, your pockets may begin to feel a slight ease in your financial burden.

For now, if you think your property is among the millions that have been poorly assessed, please take the necessary steps to have your property re-assessed. First, check your local tax assessor's office for procedures and exact deadline to file. Second, file a formal dispute with your country supplying all supporting evidence such as a recent market analysis and appraisals. Then wait about 60 days for a response. If after 60 days you still haven't heard anything, start again. Most importantly, don't quit until you get results.

Look for Clyde Anderson's Home School segments in the 7am ET hour of CNN Saturday Morning with TJ Holmes.

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soundoff (10 Responses)
  1. Katrina

    I owned a home, once! Industry came in in the surrounding area depreciating my homes value. Somehow my property tax went UP, every, single, year! I rent now and am happy to let someone else deal with the government.

    April 2, 2010 at 11:39 am |
  2. Butch Jordan

    We have added more infrastructure than we can support financially. Towns and cities have increased staff to maintain and keep up services that, realistically, can be handled by the landowner. Garbage pick up, inspectors of every variety, permits, libraries, parks and recreation, police services, utilities and lighting, and in some cases tree pruning, is just beyond what is supportable in this economy.

    Having a city that can maintain every aspect of our living is good but it does have significant drawbacks. Small repair jobs that can be handled by the landowner now require a permit, complete with inspection and, in some cities, forcing you to hire a plumber or electrician and forbidding you to do the work yourself.

    This is an erosion of our legal rights and an example of government growing into our lives and eroding liberty on a daily basis. I even know of a city in Florida that has a paid employee to go around and measure the length of grass in a citizens lawn. Fines follow if the grass in over 2 inches long.

    America has clearly lost it's focus as the land of the free and could be more accurately cast as the land of the taxed and regulated. While some of this is for our own good ....the majority of the money, and regulation, is used to keep the city fiscally healthy and hire more employees to keep up with the ever growing responsibilities.

    To cut things to a more reasonable and necessary level, we need to evaluate what infrastructure is necessary and how many employees the municipality can eliminate to save money. The taxpayers have reached a limit as to how much they can earn and how much they can pay. It's time to stop the cities and limit their taxing power and permit power..

    April 2, 2010 at 12:06 pm |
  3. Michael

    Yes, the cities/states are broke from bad planning. To make it up they are raising taxes and fees. I feel like I am being held upside down and shaken to empty my pockets.

    April 2, 2010 at 12:21 pm |
  4. Carl

    1. Get a lawyer. 2. Bring along your neighbors. 3. Have the lawyer escrow your taxes and hold them until your town values the depreciated property the right way.

    April 2, 2010 at 1:23 pm |
  5. Michael

    Maricopa country raised taxes then gave its employees raises while the rest of us are suffering

    April 2, 2010 at 4:01 pm |
  6. Christina

    In California on a approximate $500,000 home property taxes add at least $600 on to a payment. Property taxes are necessary for some things but are putting a huge stress on already high house payments. WE all need to pay taxes into our States and Country but we need to be smarter how its done so that all levels get their needs met.

    April 2, 2010 at 11:28 pm |
  7. Sandra l-g

    Great info! The house next door to me has been standing empty for over a year now and has finally gone into foreclosure – they are selling it for less than it cost to build! Another house in the subdivision is on the market for $20k less than she purchased it for but no one is going to buy while the one standing next to me is for sale at such a low price ;(

    I'm going to contact my tax assessors next week!

    April 3, 2010 at 10:13 am |
  8. Kasey

    This is extremely informative and timely information. With our country being in such a tough economic times any way in which someone can attempt to save money and make things easier on their household is welcome. I will look into this and definitely educate others.

    April 3, 2010 at 10:41 am |
  9. christy, Ohio

    Give medicaid assistance collectively. Provide food, clothing, and all daily needs in a group setting where they can HELP one anther with cooking cleaning, child care and basic needs. This would greatly cut the cost of the taxes spent to care for each in an individual setting and people that work and paying taxes would not have to pay so much.

    April 3, 2010 at 4:14 pm |
  10. Sharon Henry

    Hey Clyde
    Great Job!!!! Has a Real Estate these are the types of things that we need to know about, So that we can educate our clients. Keep up the good work, May be CNN will give you more time on the air so you can keep us inform. I will look forward to watching your show next week you always have lot of good information.

    April 3, 2010 at 10:40 pm |