There ARE Benefits to Aging! Tax Relief, at Last...
We received our revised property tax statement today.
As you may recall, I spent most of last month working like a fiend on filling out paperwork and getting our 2021 income tax return done — uncharacteristically early, for us.
The purpose of this frantic paper chase was to apply for some property tax "exemptions" that became available to us because I turned 61 years of age last year.
Due to the skyrocketing price of real estate around here, and the fact that property taxes are based on the value of your home, our annual property tax bill had gotten out of hand... and since we are self-employed and struggling, we were having increasing difficulty gathering up enough funds to pay these tax bills.
The good news is that all the work paid off!
Although we still owe the full amount from a couple of years back, our tax bills for 2021 and 2022 were rolled back from over $6,600 owing per year to less than $1500 per year. As an additional benefit, our property value is now frozen for seven years for tax purposes, regardless of how much the value of the property might increase during those years.
I am laughing slightly to myself, as it seems I have found at least one benefit of growing older!
I wouldn't exactly consider this thing we did to be ”sucking on the government teat;” instead I am reminded of something I was actually told by an IRS tax revenue agent many years ago: ”We strongly encourage taxpayers to use every conceivable deduction and exemption they can find and defend within the tax code. There is absolutely no reason why you should pay as much as a single cent more in tax than you absolutely have to!”
Noteworthy is the fact then I was told this by an IRS agent and not by a dodgy tax accountant!
We are very grateful to have this property which is our home. Well over a decade ago, we decided to take all the money we had in savings and investments, sell some old family artwork, prematurely cash in a couple of retirement plans... all so we could purchase the house outright with cash so we could genuinely be the owners of our little piece of the world, rather than having the bank be the owner of the place.
In the years since, we have made it ours, turning boring lawn into food growing space and guest rooms into home offices. It works for us. It's ours... mostly.
It's one of the ironies of life that even if you own your home outright with no mortgage, the local property tax authority can still foreclose on you and take away your house if you fall behind on your property taxes.
These days, there are a lot of people who are struggling. We live in homes where the value upon which our property tax bills are based might have increased by 300% or 400% over the past ten years alone, and so our tax bills have also increased by 300% or 400%! Meanwhile, you can be damned sure our incomes have not increased by 300% or 400% over the same time period!
Anyway, we have found a little bit of relief… and that is definitely a relief!
Thanks for reading, and have a great weekend!
How about YOU? If you are a homeowner, have your property taxes gone skywards, along with property values? Are there any kind of Homestead or other exemption programs where you are? Comments, feedback and other interaction is invited and welcomed! Because — after all — SOCIAL content is about interacting, right? Leave a comment — share your experiences — be part of the conversation!
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Created at 20220311 22:10 PST
0520/1766
Glad you over came those tax challenges @denmarkguy, I think that is a thorn in the flesh for many home owners.
Thanks for sharing your interesting post, have a great day.
Finding the right way to bring tax cost down good you made the effort, paying off ones home by retirement is a must with too many running into problems.
Not paid off attracts a lot of interest which banks enjoy. Moving into retirement village for me is a no go, they are expensive half the size of what you worked toward, cannot bring along your pet in many places, can lock you in when they deem fit like with this pandemic.
Owning your home is the right route to take, over here rates and taxes paid monthly with electricity and water bill, one is able to contact local Municipality fill out forms for reduction which saves a little as well.
There is a key distinction between "avoiding being extorted as much as possible" and "demanding government extort others on your behalf." Sounds like you fall well within the former category to me!
Good news! Are those photos of your property? I'd say you did very well.
I cashed in all my stocks etc last year to buy the house I now live in. It's quite a relief to not have a mortgage.
That's a relief indeed... And so nice of that IRS agent who told you such helpful info. Owning your home outright is such a bliss
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STOPSo glad you have some relief. Taxes are insane, and even if some 'nice' IRS guy tells you to take advantage of loopholes/system, why don't they tell you that in the first place or at least make it easy for you. It's so unfair. Glad you are ahead now though. Bugs me to tears that the rich seem to find those loopholes too easily whilst the poor slog away with no one helpiong them out.
Doing my income tax returns is something that I hate to you. I am happy that you have some good news from IRS.
Wow, that's an incredibly high property tax to have to pay! I was just thinking at the start of reading this that you were lucky to be able to claim relief, as I don't believe we can here at all, but then our taxes are what you're paying after the relief. Not that we live in a high priced area. I have to wonder what they pay in the wealthier areas, now.
It's always a pro con situation. Property value going up means good investment, but the taxes go up with it. They didn't often review house prices in the UK, but when they did it was the pensioners that were hit the hardest by the sudden jump in taxes; often living alone in those big old houses now that their families had moved on.