How Are My Property Taxes Being Determined?

The property taxes you pay every year are often a primary source of income for your local municipality, and it all starts with a property tax assessment to determine how much you owe the government. Calculating your tax assessed value will enable you to know what to expect from your property tax bill each year, helping you to create a more accurate budget.

How is Property Tax Calculated?

So, exactly how is property tax calculated? The taxes assessed on your property are based on its value, exemptions you can claim, and a property tax rate. In some areas of the country, your tax assessed value is determined yearly, while others require a property tax assessment every other year, or even only with property is sold or otherwise transferred to another person.

What is Included in Property Tax Assessment?

The total tax assessed value can vary from community to community depending on the cost of the different services the money will be used for. Property taxes typically fund local services such as:

  • Community colleges
  • Fire Department
  • Libraries
  • Local government personnel wages
  • Parks and recreation
  • Police Department
  • Public schools
  • Roads
  • Sanitation
  • Sewer
  • Much more

Each service item has its own rate that is multiplied by the assessed property value that determines that portion of your property tax assessment.

Your property tax assessment is also affected by what your property is being used for. Commercial buildings will be assessed quite differently from a single-family home that serves as your primary residence. Varying uses are taxed at different rates, though all properties that are used for the purpose are taxed at the same rate.

Examples of some property uses that will see different property tax assessment rates include:

  • Agricultural
  • Apartment
  • Commercial
  • Industrial
  • Medical/Pharmaceutical
  • Office
  • Residential
  • School
  • Vacant, raw land

In each of these individual categories are additional factors that affect your tax assessed value, including the size of the property, the construction type, age, and location.

Consequences of Unpaid Taxes

It is quite simple. If you do not pay your property taxes, the government will take away your property, and can lose your home or business. Late fees include interest and penalties that can accrue rapidly and put you in an undesirable financial position.

Local governments determine property tax laws and regulations. Consult with your municipality for specific guidelines that affect your property tax assessment. The entire property tax assessment process can be confusing and complicated. If you feel you have been improperly taxed, contact your local tax authority for details on how formally request a reassessment of your property taxes.

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