Real Estate

The Basics of Property Tax

3 Mins read

One of the most common and least favorable types of taxation in the United States is property taxes. These are set by cities, counties, and states to keep tax rates uniform. Each state has property tax parameters, which means homeowners across the country pay varying amounts of taxes.

What is property tax?

Property taxes are paid on real estate and certain types of property. The tax is assessed by local governments based on the location of the property and its value. Property taxes are infused into local government to help fund school districts, police and fire departments, road construction, and other local needs. Homeowners who fail to pay their property taxes end up with a tax lien on their property. It’s a legal claim against the property and financial assets you own. In the event you sell your property, the local taxing authority may be entitled to some or all of the proceeds. Homebuyers can do a title search to discover if there are any tax liens on a property.

Renters aren’t responsible for paying property taxes, but property owners are. This is one of the biggest recurring costs to consider before investing a large amount of money into a real estate purchase. A great way to enjoy spectacular mountain views and incredible amenities is to rent a vacation cabin. Ashe High County has years of experience offering luxury North Carolina cabin rentals. A rustic cabin is a great way to enjoy a romantic getaway, a family vacation, or explore what life in the NC mountains is like before purchasing a property. The rental company offers a range of luxury cabins, cottages, and condos with easy access to hiking trails, skiing, art and craft galleries, farmer’s markets, and restaurants. You can search for the perfect vacation cabin based on amenities such as a Wi-Fi connection, a fire pit, a deck or patio, a hot tub, a fireplace, a full kitchen, and the number of bedrooms and bathrooms.

How is property tax calculated?

Two factors are used to calculate property tax. Assessors or appraisers from the local taxing authority track the value of all properties and real estate in the taxing district and maintain a database of local property values. The assessed value of your property is likely less than its market value, depending on the location. Inspections, permit applications for remodeling, neighborhood reports, and regular updates are used to detect changes in your home’s value.

The real estate tax rate is based on a millage rate, in which one mill equals one-thousandth of a dollar. Some tax authorities apply the tax rate to a portion of your home’s value, which can reduce your tax obligation.

The best way to ensure you pay the correct amount of property taxes and avoid a tax lien is to work with a professional accountant or tax preparer. Tax preparers are endlessly busy during the tax season and are responsible for keeping client documents organized and secure. The best way to keep the final results of your work clean and professional is to keep them in presentation folders.

Mines Press carries an extensive collection of tax return folders that help accountants and tax preparers make a lasting impression. Tax folders give a professional presentation to a completed income tax return, end-of-year statement, or other client financial documents. Their custom presentation folders come in a variety of paper stocks and colors and feature pockets with business card slots for an extra professional touch.

Can you lower your property tax bill?

Homeowners can contest property tax bills by challenging the home’s assessed valuation. You must be able to show that the assessed value isn’t an accurate reflection of your property’s true value. You need to ensure the assessment data is accurate and matches the details of your property. Gather comparable listings from the area, look at tax records from the local tax assessor, and contact the assessor’s offer to learn about the dispute process.

Property taxes vary by city and state. Always consider the recurring costs of a property before pursuing a real estate transaction.