Thursday, October 25, 2007

Homeowners beware: property tax bills are full of errors, costing you and state money

An article ran this week in the Republic saying some fear school override elections will fail next month because homeowners just received their latest property tax bills, which for many people went up due to mathematical changes in the way taxes are assessed between businesses and homeowners. If you are wondering what a school override election is or why it is important, there are state limits on how much schools can spend; overrides allow schools to spend over that amount, and don't necessarily raise taxes. Sometimes they merely permit a district to spend the money they collect in property taxes.

In the process of trying to figure out for a coworker why her property taxes went up, we discovered that her house was incorrectly listed by Maricopa County as a rental property without her knowing it. It appears that the County can change the status of your house without you knowing it. Your property tax bill most likely only says whether it is Class 3 (you own your house and live in it) or Class 4 (you rent your house out to someone else). If it is Class 4, you are paying higher taxes. A quick search of the County Treasurer's website found that several people I know who are living in their own homes are incorrectly identified as renting them out, paying higher taxes, while several people who are renting their homes out are paying the lower homeowner rate and, perhaps unknowingly, cheating the state (and schools and veterans and foster kids and the disabled, etc.) out of money.

So please, if you own and live in your home in Maricopa County, go to the County Treasurer's website and make sure you are listed as "Class 3" and not overpaying. If someone you know is renting their house out, make sure they are listed as "Class 4" and are not evading the taxes they do owe, taxes that pay for schools and other badly needed services at a time when the State is facing a deficit.

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