How to Calculate Your Property Tax


In this post, you will learn how to calculate property tax on a house. When you own a home, one of your legal duties to the government is to pay property taxes. Local governments collect this tax among others and use it to fund community projects and public services.

Some of the projects they use tax money for include schools, libraries, road construction, fire departments, law enforcement, and public recreation. But when local governments depend solely on property tax income, it could become a financial burden to homeowners because taxes usually increase over time.

Also, all property owners must pay tax and you may owe taxes too. But if you think you are being unfairly charged and are overpaying, you can use these tips to reduce your property tax bill. Let us go right away into how to calculate property tax on a house.

How is Property Tax Calculated?

Your property tax is usually calculated by an assessment of the value of your property. What happens is that your land and buildings are assessed by a property tax assessor. Also, depending on where you live, the assessment is done, every one to five years.

Besides, the easiest method they use for assessing properties is by using the fair market value (FMV) which means the amount a buyer will pay for it as of the date it is being valued.

But, to get the true value the assessor will compare similar houses in the same environment with your property. Also, the assessor will take these factors into consideration when arriving at the market value. They include, if you have made any improvements and if there is any rental income, and how much it would cost to replace the property.

Finally, to compute your property tax bill, all you need to do is to multiply the local tax rate with the assessed amount. For example, if your property’s assessed amount is $200,000, and the local tax rate is 1.2% your property tax would come $2,400.

Ways To Lower Your Property Tax Bill

Now that you know how to calculate property tax on a house and the factors that lead to the final value, if you believe it is too high, you can make it lower. Follow these steps below.

1. Welcome The Assessor

To make sure the assessor makes use of the true value of your property to calculate the tax for your home, be accommodating to the official. Open your house so that he has unfettered access to every area. This will enable the official to work with facts than make assumptions.

2. Review Your Property Tax Card

Reviewing your property tax card is one way on how to calculate property tax on a house. So, collect a copy of the property tax card from the assessor’s office in your area. Also, you may get part of this information from your counties administrator’s website. Once you have it, go through to confirm there are no errors.

Specifically check the number of bathrooms and bedrooms, the square foot, the year they built the house and the type of heating and cooling appliances in their report. And confirm that the improvements and the structural conditions of your home is correct.

3. Compare The Homes In That Area

You can find out how your property tax compares to other homes that are similar to your own home in that area. And then get these facts because property bills are public records for citizens. Note that comparing homes in that area to yours may work only if the homes are exactly of the same dimensions in size and have the same characteristics.

So after comparing and you discover that your tax rate is higher, that could mean there was a mistake in calculation. Besides, you should also check whether you bought your home at a lower rate than the valuation states.

Note that you cannot use this factor if you bought a home that was foreclosed. But if you bought it lower than the amount it was assessed, then the tax office might take a second look at your request for a lower property tax.

4. You May Get An Independent Appraisal

Getting an independent appraisal is another way how to calculate property tax on a house to lower property tax. Therefore, if there are many inconsistencies on the property tax card, or you find out that the value of your home is much higher than that of neighbours, you may hire an independent home assessor.

You can get the help of an estate agent in your area to recommend one for you. Also, you may search online for the American Society of Appraisers. You should also confirm that the appraiser you chose has the required experience for evaluating the type of property similar to yours.

Also, the appraiser must be a member of the local multiple listing system (MLS) so that the valuation will be accurate.

5. Get Evidence To Support Your Case

After checking the property tax and you are sure it is not a fair value, visit your local tax office to ask for how you can Appeal for value reduction. Also, find out if there are property tax appeals. If there are, then you must meet all deadlines for filing the necessary document.

Don’t fail to ask questions if there are things about the appeal process you do not understand. And you must file your papers with the document that will support your Appeal. This will help the Appeals Board reach a fair decision. Also, they will know if the valuation is wrong. Or if it is wrong information about your property that is on the tax card.

6. Ask For Tax Reduction

Asking for tax reduction is a strategy you can try on how to calculate property tax on a house. It doesn’t matter whether they assessed your tax properly or not, you can ask them to reduce the value. Many states now grant appeals for property tax reduction.

These states may also have programs that fix the value of tax homeowners owe if they meet the set requirements. Some of these programs include tax deductions, tax exemptions for senior members of the society, veterans and their surviving spouses, owners of Agricultural properties and some physically challenged people.

They offer Homestead tax breaks in some states. This tax break will reduce the percentage of property tax some homes pay. To qualify, the property must be where you live and you can qualify by age, income, military status or disability. Also, some cities and counties may offer discounts for those that pay their property tax early.

Conclusion: You should Take advantage of tax breaks and Deduct Property Taxes. In this article, I explained how to calculate property tax on a house. Also, it is a fact that property tax helps to pay for projects and certain services that benefit your community. But when it is too high, it becomes a burden to homeowners. Therefore, to avert overpaying for property tax, take advantage of tax breaks you are eligible. And confirm that you have a fair tax assessment. But if you discover something wrong, file a tax appeal at the assessor’s office in your area.

When you file your tax return in the State and Local Taxes (SALT.), use your property tax payments to get itemized deductions of not more than $10,000. This is an indirect way to save some money. Finally, you may contact a Tax consultant in your locality if you have more questions about your property taxes.

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