During the global financial crisis in 2008 – 2009, I expected the San Francisco Property Assessor Office to automatically lower my property tax bill. After all, home prices had topped out at the end of 2006 and had declined about 5% a year for three consecutive years.
Instead of receiving a property tax bill reduction, the city increased my assessed value, thereby increasing my property tax bill! As millions of people were losing their jobs and seeing their net worths get crushed, San Francisco didn’t seem to care. It wanted its money, regardless of the economic circumstance.
During the financial crisis, I ended up spending hours of my time fighting my property tax bill. I was rejected the first year, but won my case for three subsequent years.
The government expects its denizens to meekly accept all punishments and like them too. But not a Financial Samurai. At the time, there was no way I wasn’t going to stand up against tyranny.
Tax-Paying Citizens Are Often At A Disadvantage
The city not doing the right thing during an economic crisis was my rude awakening to the principle of not relying on the government for anything. The situation also made me question whether working 60 hours a week was worth it given the income tax consequences.
You can rationally argue your case with any reasonable person or institution. But when it comes to arguing against the omnipotent government, you are always at a disadvantage.
The best example of the government’s “heads I win, tails you lose” power can be found in our system for filing taxes.
Government’s Heads I Win, Tails You Lose Policy
Government: You owe us money. It’s called taxes.
Me: How much do I owe?
Gov’t: You have to figure that out.
Me: I just pay what I want?
Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too.
Me: What if I get it wrong?
Gov’t: You go to prison
OK, you don’t usually go to prison for filing your taxes incorrectly. You simply pay a penalty plus interest. But you get the point.
Ironically, if you are an average income tax-paying citizen, you are often more vulnerable to paying taxes than the very rich who have the resources to legally avoid paying taxes.
You’re also at a disadvantage when compared against the ~50% of Americans who pay no income taxes at all. After all, if you have been steadily paying your taxes, this is a clear signal to the government to keep squeezing you like a humungous zit.
Reduce Your Property Tax Bill By Downgrading Your Property Statistics On Redfin And Zillow
To counteract the property assessor office, I encourage you to downgrade your property statistics on Redfin, Zillow, and other online property estimate sites. Your goal should be to make your home look as crappy as possible.
Over the decades,I have battled many property assessors. Every single one of them have looked up my property online to see its number of bedrooms, bathrooms, landscaping, and upgrades. The property assessor also used Google Maps to get a top-down satellite view of my property.
Given you can’t rely on the property assessor to lower your property tax bill automatically during a downturn, your mission is to proactively protect yourself by downgrading your property statistics as follows:
- Decrease the number of bedrooms you have to a still believable number. For example, if you have a five-bedroom house, decrease it to two bedrooms. Decreasing your bedroom count to one bedroom will look like an error.
- Decrease your number of bathrooms to no more than one bathroom for every two or three bedrooms. You can turn a full bathroom into a half or quarter bathroom as well.
- Decrease the livable square footage and the lot size. Cutting your livable square footage by half is a realistic amount.
- Block your home’s street view from Google Maps and Apple Maps. Here’s an article on how to do so. By doing so, someone from the property assessor’s office will have to drive out to your home to check it out. And they usually will not.
- Remove all pictures or add old rundown pictures of your home online. This tactic is excellent for Stealth Wealth and may reduce the temptation for robbers to break into your home. Now that’s a very valuable benefit!
Don’t Let Your Ego Make Your Home Beautiful
When I was young and naive, after every home purchase or gut remodel, I would go online and update my home’s statistics. If I added a new bedroom, bathroom, living room, and laundry room, I would stupidly upload pictures of the remodel. Then I would add the additional livable square feet.
Why? Because I was proud of my work and wanted to show off! But being proud and showing off only results in more reasons for the property assessor’s office to raise my property taxes! When it comes time for them to raise your property taxes after remodeling with a permit, you can really screw yourself.
Hence, after every remodel, I now downgrade my property to make it look old.
When it comes to saving money on property taxes, crush your ego. I know you might want your friends and family members to see what a nice house you live in. But making your house Instagramable may just invite envy along with a higher property tax bill.
Instead, here’s a more appropriate picture of what the interior of your home should look like if you insist on posting pictures online.
No Guarantees Of A Lower Property Tax Bill
Obviously, the people who work at the property assessor’s office aren’t stupid. They have historical records of your property to compare with in case the online statistics look off. Further, if there was ever a permit filed for a remodel, updated information about square footage and the number of rooms will likely be recorded.
That said, you don’t want to arm the property assessor with more ammunition to hike your property taxes by making your home look amazing online. Each time I appealed my property taxes, I was required to submit comparable properties and details about their size, condition, and more.
Know the property assessor does not have the right to enter your property and inspect it. Further, you also have every right to protect your privacy.
During the pandemic, I appealed one of my rental property tax bills and lost. Even though I had purchased the property price for X, the assessor assessed my property’s value at X plus $100,000!
Their reasoning was that I had purchased the price below market value. But by definition, market value is whatever someone is willing to pay at the time! What a racket.
Check out these pictures I submitted to demonstrate the old condition of the property when I purchased it. Although the bathrooms are from the 1940s, the assessor kept arguing the bathrooms looked new and great! Come on now.
The Haunted House Look
If you want to take lowering your property taxes a step further, you may also want to make the front of your house look like a horror show.
One homeowner in my neighborhood has left the front of his home looking like a haunted house since 2008. The house’s paint is all cracked and chipped. Two windows are cracked and covered with what looks like blankets. Even the gutters are all rusted and broken.
But one day, its neighbor hosted an open house. From the neighbor’s house, I could see the back of the haunted house had been fully remodeled with nice landscaping. But all the remodeling was invisible from the street. Such a brilliant way to scare off robbers and keep its property tax bill down!
Know that even if home prices decline over the next three years, the property assessor office likely won’t do the right thing and automatically lower your property tax bill. Instead, the assessor office will keep raising property tax bills and count on the vast majority of homeowners to not protest.
Please Downgrade Your Property Statistics Online
For those willing to fight, the city will likely make the appeal process cumbersome. You will also most certainly have to pay a fee to appeal. The city does this on purpose to discourage homeowners from trying.
In an economic downturn, tax receipts go down. Hence, city politicians are incentivized to raise your taxes to make up for a revenue shortfall. More money keeps the party going for politicians with protected incomes. Please beware of this sad fact.
Just like how showing off on social media isn’t a wise move, showing off your home online isn’t either. Please keep your ego in check. Make your property look as bad as possible if you want to save money on property taxes.
And when you’ve finally had enough of dealing with an unfair property assessor, then you can easily move onto investing in real estate 100% passively.
Paying $100,000 a year in property taxes is my limit. Today, I gladly invest in private real estate funds so I don’t have to deal with any shenanigans any longer.
Readers, have you smartly downgraded your property statistics online to make your home look cheaper than it really is? Why do you think the government refuses to do the right thing and automatically lower a homeowner’s property tax bill when prices decline?
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