I don't have to pay TAXES?!?

According to Benjamin Franklin, nothing is certain in this world except death and taxes, so the only thing we can do is lessen our tax burden! Why did my property taxes go up in 2022? I may not be able to answer that specifically, but let's find out ways we can lower your taxes!

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There are a few ways that you can keep your taxes low, especially when it comes to property taxes. One way is to move to Arkansas! Property taxes are lower than most States at 0.61 percent. Arkansas is also ideal for retiring or transitioning military. We rank low for sales tax at 44th in the nation, only 6.5 percent.

What are ways we can lessen our tax burden?

Exemptions are ways you can get most of your taxes written off.

• Most homeowners are eligible for the homestead credit. All you have to do is have your home be your primary residence, not a rental or a vacation home or a second home but your primary residence where you are most of the year. In Arkansas, you get $375 off your county taxes. It's only one property per year and you have to apply at the assessor's office. You'll have to provide proof of your address and you'll also have to register your personal property like your vehicles, campers and boats. This proves you're actually living there, and it is your primary residence. This also works for if you put your property in a trust, even if you're living in a nursing home and life Estates. 
• Just by being age 65 or older or 100% disabled, you have another opportunity for exemption. This freezes the taxable value of your property so when there is reassessments they don't go up. Your actual taxes don't go up but the value will. If it's your primary residence, it can't go up by more than 5% but any other property can go up by 10% - if it's commercial, land or your second home. If it's been refurbished or reconstructed, you've added any major improvements, it can go up by 25%. This may cause a reassessment to come because of you doing those improvements. You must apply for the freeze or the 100% disabled by providing: a birth certificate, a letter from the government showing you are the correct age or you're 100 disabled. This cannot transfer with ownership. As a buyer, you need to be beware when you buy a property, a homeowner may have had locked in their assessment or is 100% disabled. Make sure you know what the taxes are going to be the next year because it will change once you own it. If there's been a reassessment or they've owned the property for 20, 50 years, it's going to be a big difference in taxes.
• Another way you can save on taxes is by being a veteran. Veterans get many discounts including property tax exemptions, state employment preferences, education and tuition assistance, and discounts on hunting and fishing licenses. Make sure to contact the County or the city you move to and find out what exemptions and discounts you have available to you. You can also save on property taxes with your retirement income. The first six thousand on Social Security is exempt from income taxes and there's also limits on Railroad income from retirement that's taxes. Military pension is completely exempt so you'll have no state income taxes on Military pension.

How does the county come up with these taxes?

• How do you know how much you owe? Of course, you will get your tax bill every year, but the millage rate is where they come up with a calculation for taxes in Sharp County Arkansas. Currently, it is 35.85. Most goes to the Highland School District, so your millage is going to change not only by your county but also your school district.
• How does the millage rate change? It is voted on by the people, brought up by the school district or the county Quorum Court. The school district has recently tried to change the millage a couple times to get more funding for the school, but the vote hasn't passed. Your taxes go up based on the millage rate or if you make substantial improvements to your property, making it more than 25% of the current appraisal value, not the market value. The county Appraisal happens during the reassessment and this increase would be due to improvements you make, if you reconstructed or add an addition.
• Where do the numbers come from? Arkansas law states all real and personal property be appraised at market value and assessed at 20%. The county will appraise you're property and then multiply by the 20% for the assessed value. That number is then multiplied by the millage rate to equal your taxes. The state mandated reappraisal is going to be in 2023, which will evaluate sales data from the end of 2021 and all of 2022. Reassessments are done every three or five years just depending on the growth throughout the state but right now the legislature is trying to make it four years. It would have to be on a rolling four year throughout the county or its too much information. The shorter the time period, the better to allow for depreciation and have the better sales data, according to our County Assessor.

How will assessor know value went up?

• There are the regular reassessments, where the inspectors are going to drive by your property and see if it's changed since the last time it was assessed. It may be a different person so they might not know exactly if it's changed. They might ask to come inside but I wouldn't invite them in if I was you - I don't want to pay any more taxes just like anybody else.
• Another way that the assessor may know your tax value should go up is if you've got a building permit, which you should do to make sure everything is according to plan. It will give them an opportunity to say maybe you're making a room addition or finishing your basement and they would know that the value is going up by 25% or more. What upgrades would cause this? Finishing your basement, adding living space, even curb appeal to make your property look nicer might cause your tax value to go up. Make sure the improvement is something you're going to benefit from and not just the county when they get more taxes from you!
• You can also have a Noisy Neighbor who's complaining about the construction noise or wants to point out the tax value went up.
• Sale data is going to tell them the property value went up and this necessarily doesn't mean the actual improvements were made but the value of the property did go up. This is why it's important to reassess to see if they will go up or down, just by the market. If you make upgrades your taxes are likely going to increase. 

You received this years' tax bill -- it's not looking so good.

• You want to dispute the value because they think it's too high, the taxes are too high and you don't understand where they came up with those numbers! You want to contact your local County Assessor in Sharp or Fulton County between August 1st and the third Monday of August.
• Set an appointment with the equalization board. They'll heal your appeal of your value of your property for the current year.
• If you appeal in 2023, the appeal is only for the current bill for 2022 taxes and payable in 2023. You want to make sure you bring with you details about properties with similar features to yours which sold during the year you're appealing (previous year) as well as properties currently listed for sale but also have similar features. More importantly, these properties should have a lower tax value and more improvements than yours so you can show them you should be paying less in taxes. Your property has less improvements, features or size, so why should you be taxed the same as theirs? You've got to compare it to something else they've taxed.
• Contact your local favorite REALTOR® to help you find these sold and active homes for sale.

We've discussed reasons how you can save on property taxes, what makes them go up and how you can dispute your tax bill. Hopefully you can find new ways to save taxes! If you need any help with applying for the exemptions or if you are disputing your tax bill, reach out to me! In the meantime, check out this video how long can a home be under contract? Have a blessed day!