Friday, September 13, 2013

Distraction Tax

I try to juggle my life and sometimes I think I am doing a good job but really, I think, that is just a delusion. Take property taxes, for instance. Last year was a very hectic year for me. I vaguely remember getting my property tax valuation letters in the mail. I may have looked at it and thought, gee, they think my desert property is worth a lot of money. Too bad I can't sell it for that amount.

"That amount" was $145,000 for my 3 acres of desert land which was abnormally high. I put the letter in my drawer with the rest of my letters which haven't been sorted since I bought this house. Shortly after that I received more letters from the assessor's office and I foolishly put them in that drawer unopened. That came back to bite me later when I got a another group of letters in the mail and found out that all of my property and houses had been re-classified at non-primary residence. That wasn't too hard to fix. I had to fill out a form and tell them that my current house was indeed my primary residence.

Unfortunately, ignoring the valuation letter was a lot more costly that the classification letter. This week, when I opened my property tax letters, I realized that high valuation equals high property tax. I mean, I knew that, but I didn't think about it when I got the valuation letter. There's something about receiving a bill with dollar signs on it that makes me suddenly take notice. Sadly, it is too late to contest the valuation. That has to be done the year before around April. Still, I thought that I should find out how to get my property re-assessed for the next time. The assessor's website said that I needed to provide 3 comparable properties which have sold recently. That's very hard to do with vacant land. One property is 3 acres with septic and electricity, no water. The second piece is 1 acre with electric at the property line. I sent an email to the realtor who sold me one of the properties and she was very understanding. She said that the county over-valued the whole area but she said, if I looked at my property record on the assessor's website, I would see that the value for next year is almost 50% lower so there wasn't a need to have my property re-assessed. Ok, I should have noticed that.

So, next year my property tax will be much lower but, in the meantime, I have to pay $1,000 more that I had budgeted for my property tax. My tax on the 3 acre property has gone from $800 to $1,300 to $2,000 in 3 years! Now, maybe if I had complained last year I could have gotten it lowered and maybe not. I like to think that next years property value is so much lower because so many people complained but I don't really know. I just know that I am bummed to have to pay an extra $1,000 for not paying attention. Here I am trying to figure out how to bring in more money and I lose money because I am so busy doing other things. Lesson learned, I hope.


Lizzie@her MFW Homeworld said...

Oh wow, not good. No letters allowed into the drawer without a proper read of them first then. If you learn form your mistake then at least it has some value.

Dave said...

Ugh, Daizy, that's a pretty steep price to pay stuffing a letter into a drawer unread.

Then again, around here in Long Island, I pay about $2,000 a year in property taxes (net of a $1,000 state school tax rebate) and I own a studio apartment in a co-op complex. I don't have to worry about any unopened letters like that (although I have to stay on top of the tax rebate rules) because my co-op board and managing agent handle that well.

Tessie said...

Yeah, that's a bummer. But look on the bright side....If you itemize on your Federal income tax return, your deductions will be a bit higher this year. See, always a silver lining!

P.S. Meh, it could always be worse. I'm a drawer-stuffer, too, it happens. You know what....I even return books late to the library sometimes!

Big picture: you are a Personal Finance Rock Star compared to 99.99999% of people, so don't be too hard on yourself. Many PF bloggers I read, if this sort of thing happens to them, they immediately go into an emotional tailspin: "My financial life is ruined!!! I have to put this on my credit card!!! I have to borrow it from my parents even though I'm 40 years old!!"

Here's to being a grown-up. Sometimes you have to take your lumps, but at least you can pay for them. A rare thing these days!

Daizy said...

I think, Lizzie, that I don't read them because I don't understand them. Perhaps I should go to a government letter reading class if there is such a thing.

Daizy said...

Dave, I am certainly seeing the benefit of living in a co-op. I seem to have trouble keeping up with taxes and the maintenance is never ending.

Daizy said...

Thanks, Tessie. That was a very nice comment. I often forget to look back and see how far I've come. It is so easy to get discouraged when I am not as far along as I think I should be but my emergency fund worked exactly as it should so I should be happy about that at least.