As a homeowner, it is critical to understand precisely what kind of financial responsibilities you will assume when you purchase a home. While you might already have taken your mortgage into account, you may be overlooking your property tax bills.
Since you will be incurring this expense annually, you will need to understand how it is calculated.
How to Calculate Property Tax Bills
Your property tax bills are calculated based on the commercial value of a plot of land, as well as any structures that have been built there. Licensed tax assessors will determine the value of your property; any land used for commercial or residential purposes will have a higher property tax rate than an empty plot.
What Factors Affect Your Property Tax Bills?
To determine the assessed value of your property, the county assessor’s office can send a licensed tax assessor to check over your land. Alternatively, you can hire a private company to determine your property tax bills. However, you will need to shoulder the cost of hiring a private tax assessor.
The following factors can affect your property tax bills:
● Property Value
Your land will be assessed according to the size, available structures, and average market value of the location. Some assessors may also take the appraised value into account to determine your property tax bills.
● Deductible Exemptions
Depending on your personal and financial situation, you may qualify for property tax exemptions. These exemptions will help lower your final property tax bill by deducting a certain percentage; they can even eliminate your property bill in some cases.
Property tax exemptions differ from one state to another. Some states offer a homestead exemption, which applies when you live on your property full-time. If you are a senior citizen or a person with a disability, some states also offer these kinds of deductible exemptions.
During a property tax assessment, ask whether there are any deductible exemptions available in your county that apply to your situation.
What Is the Millage Tax?
A millage tax refers to a percentage of tax you will pay based on every $1000 of your property’s value. This is typically calculated at one-tenth of one cent on your property’s value, though it can vary from one county to another.
To determine millage tax, you will need to find your county’s mill rate, then divide the mill tax by 1,000 to get the mill rate. Then, you will multiply your property’s assessed value by the mill rate to determine the final property tax bill.
For example, if you have a property that has been valued at $500,000 and your county’s mill rate is 5%, you should divide 5 by 1000 (5/1000 = 0.005). Next, you will need to multiply $500,000 by 0.005 ($500,000 x 0.005 = 2500). This means you will need to pay $2,500 in property taxes annually.
Calculating property tax bills can be daunting if you are a homeowner. Avoid making mistakes in paying or filing your taxes by contacting A and N today! Our team of experienced property tax brokers will ensure that you pay your property taxes correctly.
