6 Tips To Help You Avoid Getting Property Tax Penalties


The time has come to prepare your property taxes, and you want to ensure you don’t get stuck with a big tax bill. Property taxes are a huge hassle for many homeowners. They can add up to thousands of dollars in penalties and interest on your payment. If you don’t pay your taxes on time, you could be facing serious trouble. But, before you jump into the deep end, it’s essential to know about the hidden tax traps that can cost you big time. To help you avoid such penalties, here are five tips to avoid property tax penalties.

What Is Property Tax?

Property tax is a levy, usually proportional to the property’s value, which a local government imposes on property owners. Property taxes can be used as a form of income or capital gains taxation. In the United States, they are set by all levels of government: federal, state, county, and city. Property tax is typically calculated using the taxable value of your home or other buildings on your property. The tax can be assessed annually or biannually. Standard methods of assessment include market value, assessments by municipal authorities, and various other criteria. The calculation of property tax for a given year typically takes into account two factors:

  1. The assessed land value.
  2. The total number of units that are subject to taxation in that year.

The tax rate for each unit owner is found by multiplying the total number of units in the building by the tax rate for each unit.

Why Might You Receive A Penalty?

Tax penalties on the property are imposed for the same reasons as regular tax penalties, i.e., failing to pay property taxes on time. They are usually charged by the government body responsible for collecting property taxes in a particular area. The charge varies depending on jurisdiction and late fee policy. Furthermore, penalties vary from state to state. According to the property tax professionals at https://www.propertytaxloanpros.com/texas-property-tax-penalties/, tax penalties for failure to pay property taxes are the highest in the entire country in Texas. However, no matter where you live, you do not want to be on the receiving end of a tax penalty, no matter what the cost is.

Moreover, the penalties can range from large amounts of money to potentially losing your home. Therefore, it is wise to ensure that you pay on time every time. While this may sound daunting, there are some things that you can do that will make your life more straightforward.

  • Use Escrow

If your bank permits you to roll your taxes into your monthly mortgage escrow payment, take advantage of the opportunity. It is usually free, dividing the yearly responsibility into monthly installments, making the bank responsible for late payment penalties. Keep in mind that most escrows do not cover bills owing to fire districts, special service districts, or water/sewer commissions, so make those payments separately. It can be much easier to plan your monthly expenses when you don’t have to worry about a hefty bill coming up.

  • Keep Your Address Updated

Unfortunately, failing to pay your taxes due to not updating your address does not carry any weight regarding taxes. The state law explicitly states that unpaid property taxes are not excused because you have not received a bill from the town you are registered in. Luckily it is not difficult to keep updated; you merely need to let your local assessor’s office and tax collector’s office know your current situation.

  • Keep A Reminder On Your Calendar

When it comes to taxes, it’s essential to plan and make sure that you’re taking care of any issues before they become a problem. The calendar can be a great way to stay on top of tax payments. It can also remind you of deadlines for when you need to file your taxes. There are a lot of tools out there that can help you stay organized, and on top of upcoming deadlines, one such tool is a calendar. There is less excuse these days for falling behind on payments because every smartphone has a calendar app that allows you to enter a date and add in reminders. By staying informed about when your various tax bills are due to be paid, you should hopefully be able to stay ahead of the game.

  • Apply For Any Tax Relief You May Be Entitled To

Even though property tax is one of the most hated taxes people have to pay, there are many ways to claim tax relief to reduce your burden. Nonetheless, you should make sure to apply for these exemptions way in advance so that you don’t get a nasty surprise when the time comes to pay. Federal, state, and municipal programs can significantly reduce or delay tax payments depending on factors such as income, age, handicap, military service, and the usage of the property. However, almost all of them require application and approval before the tax is assessed rather than after it is due.

  • Borrow From A Specialist Lender

While this isn’t ideal (you want to pay the bill instead of borrowing), it is still a practical option for many people. Because property prices have risen so dramatically around them, some people who bought their homes a very long time ago are liable for a large amount of tax through no fault of their own. While you can check to see what exemptions are available, you can always borrow money if you find yourself struggling financially and are unable to make payments. These lenders typically have a lot of experience lending the money for property owners to pay their bills, as it is often preferable to sling your home to the county or municipality. Nevertheless, make sure that you do your research and keep in mind that this should be a short-term endeavor.

  • Stay Organized

This final point is not as interesting as the others, but you will be better positioned to pay all of your taxes on time by being organized and staying on top of your expenses.

These guidelines can give you the information you need to avoid property tax penalties. If you want to avoid property tax penalties, you must be sure that you know what to expect from the county tax assessor and what they expect from you. Moreover, exercising these tips will get you the most return for your time, ensuring everything is done correctly.


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