Property taxes are annual taxes that are assessed by the government based on the value of the property being taxed. Nearly every property on the planet requires the owner to pay a property tax to their respective governmental agencies.
In the United States, Louisiana and Hawaii rank as the two greatest states for property taxes, because their property taxes amount to less than .3% of the property’s value. New Jersey and New Hampshire rank as two of the worst property tax states, because their taxes cost nearly 2% of a property’s assessed value. Some states, like Florida, offer discounts to owners who pay their property taxes within a certain time range.
It can be difficult for owners to understand exactly what property taxes are and how they are calculated for a property.
Calculating Property Taxes
A tax assessor’s office determines the value of a property prior to calculating the property tax amount of the property. As a property ages it is continually assessed by the office in order to adjust the amount of property taxes needed for the property. The market value of a property is the primary indicator for how valuable the property is. When being assessed, properties that are older typically have depreciation factored into the property tax formula. After the value of a property is determined the number is then multiplied by the tax rate of the local area. The multiplication factor is known as the mill rate and varies in different locations.
Paying Property Taxes
Owners can pay their property taxes monthly, semi-annually, or annually. For owners who have mortgages on their property, the property tax can be added to the mortgage payments that are due each month. Owners can also opt to pay the tax office directly, which is ideal for property owners who don’t have mortgages.
Different properties and different areas have different property taxes. The money collected through property taxes helps pay for schools, libraries, and a variety of other services that are offered in an area. There are a variety of methods that a tax assessor uses to calculate property taxes. Based on the calculated valuation, properties that are even right next to one another will not always have the same property tax assigned to them.