Property Tax: Key Information
This article explores the key information for understanding property taxes, including who pays, what it covers, and how it's calculated. Learn everything you need to know about property taxes today!
Property Tax: Key Information
Property tax is a tax that one must pay for the value of their real estate property. It's paid to the local state or provincial government and part of the money from the property and sales taxes is used to fund things such as public schools, public health services, road infrastructure, police and fire services and other public services.
Who Pays Property Tax?
Property tax is paid by all those who own real estate property – homeowners, landlords, businesses, etc. Generally, the county or municipality in which the property is located collects the tax. The tax is based on the assessed value of the property, which is usually different from the actual market value. Property owners will typically receive a bill twice a year, either in the mail or electronically.
Calculating Property Tax
The amount of the property tax most often depends on the assessed value of the property. This means that the tax is based on the estimated market value of the property when it is assessed (often times, this value is lower than its actual market value). This assessed value is multiplied by the tax rate set by the local municipality or county. The tax rate is usually expressed as a percentage and may vary from one locality to another.
Exemptions and Incentives
Property tax can be reduced or exempted for various reasons. For instance, those who are at the lower end of the income scale may be eligible for certain tax exemptions or deductions. Furthermore, those who use their property for business purposes may be eligible for certain tax incentives such as tax credits. It's important to check with the local governing body to understand if you are eligible for any tax exemptions or incentives.
Conclusion
Property tax is an important source of revenue for local governing bodies. Those who own real estate property need to make sure that they understand their tax bill and any exemptions or incentives they may be eligible for. It's important to keep in mind that the amount of property tax one pays is based on the assessed value of the property, which may be different from the actual market value.