Apr 012011
Property market

Image by alancleaver_2000 via Flickr

Local governments oversee the operation and maintenance of important public services and facilities. Funding for these facilities come, in a large part, from property taxes. Without these critical funds, many services, such as recreational areas, roads, libraries, waste disposal and treatment, and fire departments, would be unavailable to the public.

Annually, the governing boards of these local facilities and services will analyze and decide upon a budget for their needs. After budget approval, a tax rate is figured by dividing the current tax pool by an assessed value of the given jurisdiction. Some states and municipalities use a flat-rate method known as millage tax or millage rate. Under this system, taxes are assessed as $1 for every $1000 of the property’s assessed value.

A property’s assessed value is based on current market value of the property. Other factors, such as condition, location, recent area growth, and recent sales prices of nearby property are taken into consideration as well. If a property owner feels their assessed value is too high, they can request a series of Residential Property Tax Appeals through local administrative offices or the local assessor’s office (Click here to learn more). In addition to this, each state sets an assessment rate used to calculate taxes due.

With the assessed value, assessment rate, and tax rate, it is simple to figure out the taxes due for a property. As an example, we will assume a property value of $145,000, with an assessment rate of 9% and a property tax rate of 23%. The first step is to multiply the assessed value of $145,000 by the assessment rate of 9%, resulting in a total of $13,050. Next, multiply this total by the current property tax rate, in this case 23%, resulting in a final total due of approximately $3001.

Property taxes are due annually, typically around September or October. Failure to pay any taxes due may result in fines and penalties, according to local and state laws. In the event that taxes remain delinquent for an extended period, most local municipalities have laws and processes in place for the seizure and sale of property to reclaim debts owed by individuals. However, using services and tax credits available in their area, most property owners can prevent these events from occurring. Currently, approximately 75 percent of states offer credits and exemptions to households that meet various criteria.

Adele Rigo enjoys time with her family and friends, she works for a property tax protest firm in Houston, she loves crafting and hiking. Contact him at his website for more information.