With home ownership comes great responsibility, and sometimes that just means paying more money. Property taxes can be a pain, and when you see an increase, it’s even more concerning and disheartening. Here are the top 5 common reasons your property taxes increase.
1. Home Improvements
Whether you’re adding a bathroom or kitchen, it can cause your property taxes to increase. Anytime you renovate or add additions to your home, it increases the value of your home. The more valuable your home, the more property taxes you have to pay.
If you’re thinking about renovating, calculate the work costs, how much value it will add to your home, and figure out if you can afford the tax bill. If not, you might want to think about saving some more money before renovating.
Periodically, counties and communities will higher a professional to assess the values of people’s homes and their properties to ensure the tax burden is accurately spread out. Different factors can cause your home’s value to increase during this like:
- Changes since previous revaluation
- Sales in neighborhood
- Valuations in neighborhood
- Changes in economy/housing market
- Changes in the area
3. Nearby Sales
If your neighbors sell their home for more than the asking price, your property taxes are likely to increase as well. Professionals say this is the least advantageous way your tax bill can increase because you don’t benefit from it in any way.
4. New Schools
The reason your property taxes can increase because of a new school is:
- Communities and counties increase them to help pay for school projects.
- New schools mean new families, and the community becomes more desirable.
5. Higher Government Budgets
The main reserves for counties and communities comes from property taxes. When government employees need a raise or budget needs of the community increase, property taxes increase. There are laws, though, that limit these increases and also call for voter approval.
How to Protect Yourself
One way to protect yourself is to appeal your home’s property assessment. You can do this by looking for homes around you that are selling for less than what your home has been assessed as.
Another way is to make sure your property taxes reflect your amenities. Make sure the correct numbers of bedrooms, bathrooms, and living areas are listed.