In his article in the March/April 2014 edition of the AZ CPA Magazine, state & local tax expert attorney James Busby reminds tax practitioners of the most overlooked tax, the property tax.

Property taxes are calculated using values set by the county assessors office, multiplied by an assessment ratio and a local tax rate.  Real estate is appraised en mass, generally using statistics including per-square-foot, comparable sales, and neighborhood appreciation.

Tip #1 – Ensure proper classification
Real estate is taxed based on its use.  Principal residences (including those in which family members reside) are subject to a lower tax rate than investment property such as rental real estate.  If your property is classified improperly, you may be paying too much tax.

Tip #2 – Review your valuation
Valuations are in place for the following year.  The county assessor must mail a ‘Notice of Value’ card to you no later than March 1.  The assessor’s opinion of the market value of the property is noted as Full Cash Value.  If you cannot find your valuation, click here to search for your subject property.

Tip #3 – Exercise your right to appeal
The assessor rarely has a full cash value that exceeds the actual value of your home, but if it does, you have appeal rights.  You can find petitions by clicking here.

An improper classification of your property can cost you hundreds, even thousands (in the case of commercial property) of dollars a year.  Knowing your rights concerning this often overlooked tax will make you a better consumer.  If you need more information, please schedule an appointment today!