How to Determine Property Tax Liability
Property taxes are the major source of income for local authorities such as towns, cities, townships, and many other special districts. Property taxes are collected by officials from local governments. These taxes are useful in paying for different services such as local infrastructure, operations, welfare, and more. To avoid instances of being overcharged, you should know how property tax is estimated by considering the steps explained below.
You should be informed on the amount your property is worth. Property taxes are charged in proportion to the land value. Lands that have much value attract more property taxes. Since the value of land is subject to change at any given time, so does your tax liability, even in instances when your local government charges the same rate of tax. To determine the value of a land, get a local assessor who can tell you the value of your area.
Take the value of the property and add it to the total improvements. In various instances, one acquires a land that is bare and you put up buildings or buys a land that has some buildings and engages in building more. These buildings contribute to the overall value of a land. The much a land costs are influenced by the value of the land and the value of what you build on it. To get the total value your property is worth, you should add the two values together.
You should know the tax rate charged by the local governments. In most cases, property tax is a percentage of the prevailing value of the property. This tax percentage can change in various times as a result of a change of the needs of the agency that needs the taxes. If your government has a deficit in the budget, it may hike the tax rate to help it collect more revenues. It is, therefore, necessary that you get the recent rates from the local governments as well as municipalities.
You should know property tax rates demanded by other local agencies. On top of governments, there are other local agencies that depend on the amount garnered from taxes. Other organizations that are involved in serving the local populations as well demand a portion. Local entities such as cities and towns need taxes from local people.
Total the tax rates then multiply the value by the worth of the property. After knowing all the property tax rates you are needed to pay, add the various tax rates to obtain the total property tax rate you need to pay. Take the entire property tax rate and multiply it with the value of the property. The figure displayed is your total property tax.