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How Are Property Taxes Calculated?

Once you become a property owner you will own property taxes forever and faithfully on an annual basis.  On average, most folks will pay their bill when it arrives without question however, a time may arise when you find yourself wondering whether you’re actually paying the right amount for your property taxes. With that said, we need to learn more about property taxes calculation, and how values are determined.

Why Do You Property Taxes? The taxes that you pay on property are accumulated by the federal and state governments as a source of noteworthy income. Normally, in the form of a percentage, where legislatures, councils and boards will come together to decide the appropriate amount of revenue that should be made. Some of the services funded by your property taxes may include transportation, parks, libraries, emergency services and education.

Calculating Property Taxes – The property tax calculation is the assessed property value and mill levy. What is a mill levy? In simple terms, the mill levy is the rate levied on your property’s value, with one mill representing the tenth of a cent. Tax levies for each jurisdiction are calculated individually, and then added together to determine the complete amount for a whole region. Often, the county, city and school district will have the power to levy against properties in their boundaries.

Assessing the Property – Property taxes are mostly determined by taking the amount of mill levy, and multiplying it according to the value assessed for your property. The value of your property is an annual estimation that is performed by professionals, with the intention of deciding what the reasonable value of your home would be on the market, based on market conditions, and the current situation of real estate.

The assessor responsible for your home will be expected to review any significant information, including what similar properties in your area may currently be selling for under the current state of the market. They will also consider the costs of replacing the property, any maintenance costs and how much income you might be making from it.

 

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