Every single year there are millions of homeowners that have to deal with property taxes and in most situations, when the tax bill arrives and it seems reasonable, people just pay it and move on with their lives. That being said, to make sure you are not being overcharge on property taxes it’s important to understand how they are even calculated – which surprisingly, most people don’t. Perhaps it’s one of those situations where you smile and blindly do as your told but more and more people are waking up to check what their calculations are and whether they are owed money.
The property taxes that are being accumulated by the states and the federal government serve as a major source of income. In most cases, these taxes come in the form of a percentage, where many different councils, boards and legislatures will decide the appropriate amount of tax revenue that needs to be raised. They will have a hearing on the budget to decide the amount of money that will be needed so that the government can cover its expenses with no financial challenges in the year ahead. Tax resolution companies out there can help you to learn what your property taxes pay for but usually they fund services that are normally funded by property taxes which include education, emergency services, transportation, libraries and parks as well as difference recreational activities. The way property taxes are calculated would be through the use of mill levy and the assessed property value.
If you don’t know what it is, the mill levy is simply the tax rate levied on your property value, with one mill representing one tenth of a cent. So for a grand of assessed property value, one mill would be equal to one dollar. Tax levies for each tax jurisdiction in an area are calculated separately and then all the levies are added together to determine the total mill rate for an entire region. Generally the city, county and school district each have the power to levy against the properties in their boundaries. So each entity would calculate it required mill levy and it would all be tallied up to equal the total mill levy. Sounds complicated doesn’t it? It doesn’t have to be if you use the correct companies to back you up and help you with your taxes. Maybe you have an individual accountant or an office you use every year. Use the services available to you! Property taxes are calculated by taking the mill levy and multiplying it by the assessed value of the property. The assessed value is a yearly estimation performed to decide the reasonable market value for your home based upon prevailing local real estate market conditions.
Property taxes can be very confusing for many homeowners and to ensure you are paying the right amount in property tax, you must understand how the property is valued and how the taxes are calculated.