Helping with the Tax Implications of Your Home’s Value

How Your Home’s Value can Effect your Property Taxes

Owning a home comes with several financial responsibilities, and property taxes are one of the biggest ongoing costs for homeowners. However, understanding your home’s value can help ensure you’re not overpaying in property taxes while also allowing you to maximize tax deductions when making improvements. Let’s dive into how knowing your home’s value can impact your taxes and what you can do about it.

Are You Paying Too Much in Property Taxes?

Property taxes are typically calculated based on your home’s assessed value, which is determined by your local tax assessor. However, these assessments don’t always reflect the true market value of your home, and sometimes they can be outdated or inaccurate. If your home has been assessed at a higher value than what it’s actually worth, you could be paying more in property taxes than necessary.

What Can You Do? If you believe your home’s assessed value is too high, you can file a tax appeal with your local assessor’s office. To strengthen your case, gather recent comparable sales data, an appraisal, or a market analysis from a real estate professional. Successfully appealing your property tax assessment could save you hundreds or even thousands of dollars annually. If you live in New York, you can navigate their Municipal Profiles website to find your local assessor’s office.

Read More about Assessors of NY here.

Maximizing Tax Deductions for Home Improvements

On the flip side, if you’ve made major renovations or improvements to your home, its value may have increased, which can work to your advantage come tax season. Certain home improvements, such as energy-efficient upgrades, adding a home office, or accessibility modifications, may qualify for tax deductions or credits. Additionally, if you plan to sell your home in the future, tracking these upgrades can help reduce your capital gains tax liability.

What Can You Do? Keep detailed records of all home improvements, including receipts and before-and-after photos. Consult with a tax professional to see which improvements qualify for deductions or credits. When selling, work with a real estate agent to ensure these upgrades are factored into your home’s market value.

Find the New York State residential tax exemption for capital improvements application here.

Preparing for a Potential Reassessment

If your home has increased significantly in value, you may eventually face a reassessment, which could lead to higher property taxes. However, many jurisdictions have laws that limit how much your property taxes can increase year-over-year, so it’s important to understand your local tax policies.

What Can You Do? Stay informed about your local tax laws and potential reassessments. If you’re planning to make significant improvements, consult with a real estate professional or tax advisor to understand how it might impact your property taxes.

Find the NY state and local tax handbook here. Navigate to the table of contents, select local taxes, and then select property taxes to learn more about how property taxes in NY work.

Final Thoughts

Knowing your home’s value isn’t just about selling—it plays a crucial role in managing your financial obligations as a homeowner. Whether you need to challenge an overassessment, take advantage of tax deductions, or prepare for future changes, staying informed can help you make the best financial decisions. If you’re unsure of your home’s current value, reach out to me for a free market analysis to ensure you’re making informed tax decisions.