Taxation can be confusing. You should feel confident and understand exactly what property tax is. A team of property tax experts can help explain the taxes that apply to your real estate. Keep reading to learn more about property tax and learn ways to potentially lower it.
What is property tax?
Property tax is money owed by a real estate owner to a local municipality. A property owner can be an individual or a business. The amount taxed is based on the tax rate and the current value of a property. Tax rates are determined by local jurisdictions which could include your local city, county, state, or other municipality.
How are property taxes calculated?
A team of assessors begins by determining the current market cost of your property and creating an appraisal. Appraisals include the value of the land, buildings, and can also include personal property like vehicles. Property owners have the option to file a dispute over this assessment.
Assessors will then multiply your property’s value by the tax rate. The tax rate is set by the jurisdiction where your property resides. These rates may be set in elections approved by voters and taxpayers.
What do my property taxes pay for?
Property taxes fund important services. Most of the funding for public services in your town or city comes from property taxes. This includes police and fire departments, school districts, and construction.
Your community also benefits from property taxes in other ways. Property taxes provide the bulk of funding for local libraries. Public parks, recreation centers, and pools are also funded by property taxes.
What is property tax exemption?
Exemptions are one way you can lower your property tax bill. Check with a team of property tax experts to see what exemptions are available in your state. Here are a few common kinds you could qualify for.
If you are over the age of 65 you may qualify for a reduction on your property taxes. There may be other requirements, like living on the property for a certain amount of time. If you are approaching your 65th birthday, add property tax to the list of discounts you can receive.
Some states have tax exemptions for disabled veterans. Surviving spouses may also be eligible for partial or full exemption based on the rules of their state and jurisdiction. This can be a partial or total exemption based on your disability status.
If your land produces an agricultural product, you could qualify for this kind of exemption. In some states, you may be taxed on the value of the products rather than the market value of the land. This could mean saving on your property taxes since your yearly income will almost always be less than the land’s value.
You could have the option of combining multiple exemptions if you qualify. This is why it’s a great idea to work with an expert. They can identify and complete the paperwork you need to reduce your property taxes.
What should I look for in a team of property tax experts?
Ideally, your local property tax experts know about specific property taxes that apply in your area as well as taxation in general. They should be up to date on any changes to tax rates and laws. And they should always be professional and make you feel confident in their decisions to handle your property tax bill.