Learning how Property Taxes Work

Property taxes are duties levied by the government on real properties of individuals or private entities. Generally speaking, in order to impose real property taxes the government assesses the properties of its market value and makes this assessment as the basis for determining the tax bill of a taxpayer. Most states has its own method of ascertaining the value of the real property thus tax rates differ from state to state. Basically real properties are classified into: residential and commercial properties. The cities, counties, towns, villages, school districts and special districts in a state obtain their money from real property taxes to fund schools, salaries for policemen, fire fighters, for repair and maintenance of roads and bridges and paying other services that its residents enjoy.

The assessment of the real property is done by the assessing unit of a taxing jurisdiction. Every piece of land no matter of size, together with its structures in it must have an assessment. Although, not all real property is taxable; there are real properties that are exempted from paying real property tax such as properties owned by religious groups and government owned real properties; others have partial exemptions such as the veterans. The assessor determines assessment and taxable value of the property, and it is usually based on the value of the property minus all the exemptions applicable to it. The tax bill is based upon the tax rates of the taxing jurisdiction. Obviously the higher your property assessment, the higher will be the taxable value and the higher will be your tax bill. So you must make sure that your real property is fairly assessed of its value. If you are doubtful of the assessment, you can always discuss the matter with the assessor informally. If you are not still agreeable, you can take up the matter with the Board of Assessment Review.

In the U.S. there are other forms of property taxes; there is personal property taxes which impose taxes on:

• Automobiles, boats, aircrafts and the likes

• Other valuable goods such as arts masterpieces

• Assets those are intangible such as stocks or bonds.

Some states allow a separate real estate taxes. These are the tax based on land value and the tax based on the building value. The assessment of the personal property taxes is done in almost all government level. However, these are commonly done by states.

The changes in real property taxes are affected by the following factors:

• The city, county, town, municipality, school district or special district has adopted a bigger budget.

• Aside from the real property taxes, the other sources of revenue have decreased.

• The assessing unit has changed its taxable assessed value.

• The apportioning of the tax levy has altered.

As a taxpayer you should strive to be concerned with the rising real property taxes in your locality by getting involve in matters concerning the budget and expenditures of the taxing jurisdiction of your locality. These taxing jurisdictions are the counties, cities, towns, villages, school districts and special districts.





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