Mellody Hobson: Save on Property Taxes

Jan. 22, 2007 — -- Single women represent roughly one-fourth of the country's home buyers, and many of them get stuck with a huge tax bill.

"Good Morning America's" financial contributor Mellody Hobson recently shared tips on how homeowners could save thousands of dollars a year.

Although the National Taxpayers Union found that 60 percent of property in America was overassessed, Hobson said there was good news for homeowners.

"Of the 30 percent of people who go and make an appeal, one in three actually win," she said.

Hobson explained how property taxes worked.

"The way property assessments work, [assessors] look at what the property value is, and they just multiply that by the tax rate for the community. If you have a $100,000 home, you're going to pay $5,000 in taxes if you have a 5 percent tax rate," she said.

New homeowners could get hurt by the system.

"When you buy a home for the first time, you're presented with a tax bill for that year, not knowing that the property has a very high likelihood of being reassessed, especially if you've paid more money for the house than the previous owner. So the next year's bill could be significantly higher," Hobson said.

Hobson said human error could also account for overassessed property.

"Tax assessors are human, too. They're people, too. They make mistakes, but sometimes they have a mathematical error. They have a clerical error. You never know," she said.

She also advised homeowners to look at the property description on their bill.

"Sometimes it's wrong," she said.

"It will have more rooms than you actually have. It will have a lot size that's bigger. You want to pay attention to those kind of details that can … lead to the sense that your home is worth more than it is, and ultimately is being overvalued."

Hobson suggested four things homeowners could do once they had their tax bill in hand.