How are Property Taxes Calculated?
Property taxes are something which millions of homeowners must deal with each and every year. In order to know if you are paying the appropriate amount on your property taxes, you will first need to know how they are calculated.
When purchasing your home or preparing to pay for your yearly property taxes, it is important to know how much your property taxes should be. In most cases your property taxes are calculated using the assessed property value as well as through the use of mill levy.
If you do not know what a mill levy is, it is simply the tax rate which is levied on your property value. Typically, one mill would represent 1/10 of a cent. For example, should your property have an assessed value of $2000, one mill would equal $2. For each tax jurisdiction, the tax levies within an area are calculated separately and then all the tax levies would be added together to total your regions total mill rate. In most cases, the county, the city and the school district you reside in can levy against the properties. To discover what the mill rate for your region is contact your county’s tax assessor.
Property taxes tend to be calculated by multiplying your assessed property value by the mill levy. Typically the assessed value is an estimation that decided on a reasonable market value for your house and tends to be based upon the conditions of your local real estate market. The county’s tax assessor generally reviews any relevant information about your property and it’s surrounding to estimate the overall value. Things which may play a factor in your assessed property value are: selling prices of similar properties, maintenance costs for the property, improvements to the property and income gained from the property.
Once the market value of a property is established it would then be multiplied by the assessment rate to establish the assessed property value. The assessment rate tends to vary based on jurisdiction and could be any number below 100 percent.
To find out exact numbers and estimation criteria contact your local tax office.