Property Tax Appeal Process

While home prices are still low, property taxes have reached the breaking point nationwide. Many local governments have raised property taxes in an attempt to compensate for declining revenue.

According to The Tax Foundation, 3.5 percent of household income went to pay property taxes in 2009, compared with 2.9 percent in 2005. Clearly, this is not good news for homeowners. Fortunately, there are ways to reduce your property taxes.

There are a multitude of state, county and municipal property tax relief programs which are available to property owners. Although these tax relief programs vary, they typically target categories of people who are the most financially burdened.

Depending on the relief program, a property owner may qualify for a tax rebate, tax credits, a tax deferment, 'freezing' of tax assessed property value, a homestead exemption, or a property tax payment installment plan.

Programs for Senior Citizens

Most states offer relief programs for property owners who are 65 or older. Some of these programs may be based on an individual's income and marital status.

The state of Illinois offers more than one tax relief program for the elderly. The state Senior Citizens Assessment Freeze Homestead Exemption 'freezes' the equalized assessed value of property owned by a senior citizen who satisfies the program's income requirements, so that their taxes will never increase for inflation.

The Illinois Senior Citizens Homestead Exemption offers a $3,500 reduction in the equalized assessed value for a principal residence if the property owner is 65 or older.

The Senior Citizens Real Estate Tax Deferral Program allows senior property owners within specified income limits, to defer all or some of their real estate taxes. The state pays the taxes for which it will receive reimbursement at 6 percent interest upon the owner's death, or if the property is sold or transferred.

Programs for the Disabled

Tax relief programs are also available to individuals who are disabled. Disability determination requirements may vary according to state. Often, tax relief programs available for senior citizens are also available for disabled persons.

Missouri, for example, gives the same tax credits to totally disabled individuals as they give to senior citizens, a maximum of $1,100 to property owners if their home was also their primary residence.

Programs for Veterans

There are a variety of different state property tax relief programs for veterans and their surviving family members. Some of these programs require that the veteran be disabled or have served during wartime.

Texas offers several tax relief opportunities for disabled veterans depending upon their determined percentage of disability.

Veterans who have either a 100 percent disability rating from the Veteran's Association, or have been classified as unemployable, are eligible to receive a 100 percent homestead exemption if their property is also their primary residence. The 100 percent homestead exemption also applies to their surviving spouses after the veteran dies.

Veterans who are not 100 percent disabled, but do have some level of disability, are allowed an exemption amount based on their percentage of disability.

Programs for Low or Moderate Income Homeowners

Some states offer property tax rebates as part of their relief program. An application may need to be filed, but sometimes the rebate checks are sent automatically. There are usually maximum income and residency requirements.

New Jersey homeowners whose annual gross income does not exceed $40,000 are eligible for a property tax rebate. The maximum annual income limit for disabled and senior property owners is $100,000. The rebate is based on equalized home values up to $45,000 and the effective municipal school tax rate.

Most property tax relief programs usually require that a property owner meet other eligibility requirements and file an application. Check with your local taxation authority for details about available programs to help you reduce taxes. (EA)