Understanding Real Estate Taxes

If you are like many homeowners then you enjoy being a property owner; but along with that enjoyment you also have a responsibility to pay your share of real estate taxes. You may know them as property taxes, but as a refresher keep in mind that real estate taxes are based on an assessed value of a parcel of land and any structures that might be built on it. By using a formula and calculating a variety of factors such as mill rate and assessed rate, a assessor can determine the assessed value of a piece of real estate. After the calculation is completed, a local tax rate is used to determine the amount owed. Tax rates vary from town to town and county to county and are typically owed on an annual basis or paid twice a year.

Real estate taxes are collected by the city or county in which the property is located. The range of taxes will vary widely depending on tax year, mill rate and market values. Be prepared because the taxes can be priced reasonably or can be high. One of the factors that determine your tax bill is based on whether your property is located in a prime location and receives a good amount of revenue from tourism. If you live in those areas you will have higher real estate taxes than unpopulated areas. Public records maintained by the municipality in which you live monitor improvements made to real estate that may have an impact on its value. While you may think that you are being overtaxed, the monies generated from these taxes help support many vital local programs, public services and facilities such as recreational parks, local schools and many other important city services.

Many times homeowners want to raise the market value of their property but neglect to consider that this also means a rise in real estate taxes. Regardless of property taxes, the advantages for the property owner are too numerous to ignore. By simply performing professional landscaping, you can tremendously increase their property’s value. The upside of increasing taxes means that as the taxes increase, so does home equity, meaning the chance for a home equity loan improves. Another advantage is that real estate taxes can be used as legitimate deductions when the time comes to file your income tax return that ultimately put more money back in your pocket. On the other hand when property values decrease, this can also result in lower taxes. When an owner decides to sell the piece of real estate at a lower value it can mean doing so at a loss.

If you take the time to do the research you find many great resources offering advice to property owners on how to lower your real estate taxes. There is some great advice that from moving to a area with lower property taxes to verifying information regarding the currently owned property is accurate and up to date at the tax office. Ultimately, knowing how your local assessor determines property value is also important. Another great source of savings is offered to those who are war veterans or on fixed incomes. You might also qualify for tax breaks if you own structures that use energy saving features.

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