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Resident questions inquiry from assessor’s office
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Resident questions inquiry from assessor’s office

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Q: I have a question about a letter I received from my county assessor’s office. I live in Maricopa County, Arizona. The form asks how many people live in our home and what we’re doing with the home. The form also states that if we don’t respond, they will fine us.

My take is that it’s none of their business how many people live in my home. They’ve also threatened to reclassify my property if we don’t respond. I’m wondering what they mean by reclassification. Can they try to reclassify our property as abandoned and take over the home? We live in a normal suburban area.

A: Our first thought is, why wouldn’t you just answer the questions and mail in the form? But the right to privacy in housing runs strong for many homeowners. It’s the “your home is your castle” mentality, except that in practice it’s tough to disengage from the surrounding community completely.

Let’s think about why the assessor’s office or other taxing authority may need or want information about your home or its occupants. Where property owners pay real estate taxes, the taxing bodies in those areas always use a formula to determine how much to bill each property. The key to your question is figuring out what that formula is and whether the information the assessor needs will help reduce your real estate taxes.

In many areas of the country, homeowners who live in those homes as their primary residence receive a huge discount on their real estate taxes. Let’s say your primary home is in Michigan and you pay state income taxes as well as property taxes. Some of the state income taxes you pay may filter down to your local municipalities and school districts.

On the other hand, if the property is a vacation home rather than a primary residence, and you don’t pay state income taxes, the taxing authorities will charge a higher rate for property taxes to help cover the expense for the local municipalities and school districts that otherwise would have been paid through income taxes.

That’s only one example of how an owner’s use of a property can affect the amount paid in real estate taxes. In other areas, homeowners receive a reduction in their real estate taxes if they use their home as their primary residence, are a senior citizen, a veteran or are disabled.

In some counties in Illinois, members of the armed forces returning from active duty or veterans may get a reduction in the amount owed for real estate taxes. The taxing authority may go even further to eliminate all real estate taxes (up to a certain amount) for veterans with disabilities.

In Maricopa County, your local tax assessor’s office offers personal exemptions offered to widows, widowers and disabled residents. According to the website, “The purpose is to reduce the assessed value of property with a corresponding reduction in tax($). The exemption is based on income, value of property, residency and number of family members 18 years of age or older residing in the household (per state statute.)”

In addition, Maricopa County also offers a Senior Value Protection Program that allows senior citizens the opportunity to “freeze their property value for a period of time, primarily based on income, age and residency (primary residence).” The “Senior Freeze” does not “freeze your property TAXES, it freezes the taxable portion of your property value…”

Clearly, the personal exemption is based on a variety of criteria, including the number of people who live in your home, which is one of the questions on the form you received. If you fail to return the form, it’s possible that your real estate tax bill could go up, perhaps substantially.

You should call the county tax assessor to review your most recent real estate tax bill and determine what exemptions are on the tax bill, reducing the amount you pay, and what other exemptions you might be entitled to take.

But we don’t advise tossing the form because it’s “none of their business.” You might be throwing away an opportunity to save yourself some hard-earned cash.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)

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