How homeowners can lower property taxes

By Tom, CPA · Updated October 27, 2026

Part of: Easy Tax Strategies

TL;DR: Property tax is local, so the best moves are local: check your assessment record for errors, appeal with comparable sales before the deadline, and claim every exemption you qualify for (homestead, senior, veteran, disability). Then look for state credits, deferrals and freezes. On the federal side, the 2026 SALT cap is $40,400 for most filers, but it only helps if you itemize.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Your property tax bill is set by two numbers: the assessed value of your home and the local tax rate. You can't vote the rate down by yourself (well, you can try at the school board meeting), but you can absolutely make sure the assessed value is right and that every exemption is applied. Assessors value thousands of homes with mass models, so errors are common. And exemptions are almost never automatic; you have to apply.

Rules vary by state and county, so think of this as a checklist to run against your local assessor's website. Examples here use a few states' official figures as of October 2026.

CPA Warning Label: Appeal deadlines are short and strict, often just weeks after assessment notices go out. Missing one usually means waiting a full year, no matter how wrong the value is.

Step 1: Read your assessment like an auditor

Pull your property record card from the assessor's website and check:

• Square footage (finished vs. unfinished basement is a classic error).
• Bedrooms, bathrooms and garage size.
• Lot size and any features you don't have: a pool you filled in, a fireplace that isn't there.
• Condition and quality grade. A 1978 kitchen rated "excellent" is a gift to the county.

Factual errors are often fixed with a phone call or a simple form, no formal appeal needed.

Step 2: Appeal with comparables

• Find the deadline on your assessment notice. It's often 30 to 60 days, depending on where you live.
• Gather three to five comparable sales near the assessment date: similar size, age and neighborhood. Public records and listing sites work.
• Compare assessment ratios: if similar homes are assessed lower than yours, that's an equity argument.
• Document problems: photos of foundation cracks, an old roof or contractor estimates.
• Consider a recent appraisal if you just refinanced or bought; a purchase price near the assessment date is strong evidence.
• Be polite and brief at the hearing. Boards hear angry speeches all day.

Fee-based appeal firms usually take a share of first-year savings. Many homeowners can do it themselves, but a firm can help for unusual properties.

Illustration

Dana's home is assessed at $400,000 at a combined rate of 1.2%, so the bill is $4,800. Her record shows a finished basement she doesn't have, and three comparable sales average $372,000. The board lowers the value to $370,000. New bill: $4,440, which saves $360 a year, and in many places that lower value is the base for future years too. Total effort: one afternoon. Then she checks whether she has applied for the homestead exemption. She hadn't.

Step 3: Claim every exemption

• Homestead or principal residence exemption: most states reduce the taxable value or rate for your main home. In Michigan, the principal residence exemption exempts a home from up to 18 mills of school operating taxes (Michigan Treasury). You usually must apply once, and some states make you reapply after moving or refinancing.
• Senior exemptions: Ohio's means-tested homestead exemption shields $29,700 of market value for tax year 2026 ($59,400 for certain disabled veterans and surviving spouses), with an income threshold of $41,000 (Ohio Department of Taxation). Virginia lets localities offer exemptions or deferrals for owners 65 and older or disabled (Code of Virginia 58.1-3210).
• Veteran and disability exemptions are often large, and may be full exemptions for veterans with a 100% disability rating in some states.
• Agricultural, forest or conservation use programs for qualifying land, with rollback taxes if you change the use later.

Step 4: Credits, freezes and deferrals

• Circuit breaker credits refund property tax that's high relative to income. Michigan's homestead property tax credit for tax year 2025 tops out at $1,900, and is not allowed if total household resources exceed $71,500 (MI-1040CR instructions). Household resources include Social Security and Roth conversions to the extent included in AGI, which matters for conversion planning.
• Assessment freezes for seniors keep the taxable value flat.
• Deferrals let qualifying owners postpone taxes until sale or death, usually with interest and a lien. Helpful for cash flow, but the bill is just postponed.

Step 5: Check the bill and the escrow

Even with a correct value, the bill itself can be wrong, and the mortgage escrow account can turn a small error into a big monthly payment:

• Confirm the exemptions actually appear on the tax bill, not just on your application. Approved exemptions sometimes take a year to show up.
• Check the taxing districts: a wrong school district or special district code can change the rate.
• Review the annual escrow analysis from your mortgage servicer. If the servicer projects a higher bill than the county actually issued, ask for a corrected analysis and refund of any surplus.
• Look for late-payment penalties if you pay directly. Many counties offer installment plans, and some give a small discount for early payment.
• After a sale or refinance, make sure the old owner's exemptions are removed and yours are added, or you may get a surprise back-tax bill later.

Step 6: The federal deduction

Property tax on your home is deductible only if you itemize, and it shares the SALT cap with state income or sales tax: $40,400 for 2026 ($20,200 married filing separately), reduced for higher incomes, but not below $10,000 (IRS). Compare with the $32,200 joint standard deduction; see SALT cap planning and itemized vs. standard deduction.

• Rental property tax goes on Schedule E and isn't subject to the cap (Publication 527).
• Special assessments for improvements like sidewalks add to basis rather than being deducted.
• Only tax actually assessed and paid counts. Paying next year's bill early only works if it has been assessed.

Energy-efficiency improvements no longer get the residential credits: 25C and 25D ended for property placed in service after 2025. See energy tax credits for homeowners and easy tax strategies.