How to Determine Property Tax Liability
Property taxes are the major source of income for local authorities such as towns, cities, townships, and many other special districts. Property taxes are gathered by officials from local authorities. The taxes are of significance in making payment of various services, for example, operations, local infrastructure, welfare, and others. You should follow the steps described below to know how much property tax you should pay to avoid being overcharged.
Ensure you know the value of the property in question. Property taxes charged are a percentage of the much a land is worth. The higher the value a land has, the higher the amount of property one pays. Since the value of land is subject to change at any given time, so does your tax liability, even in instances when your local government charges the same rate of tax. To know how much your land is worth, find a local valuation company to reveal the value of lands in your area.
Take the value of the property and add it to the total improvements. In most cases, you acquire a land that has nothing on it and improves it by building or acquire a land that has been built upon and adds more buildings. These buildings contribute to the overall value of a land. The value of a land is determined by the amount the land itself is worth and the value of anything built on it. To get the total value your property is worth, you should add the two values together.
Find the tax rate the local government is charging. Generally, property tax is assessed as a percentage of the current value of a property. This tax rate is subject to change from time to time due to the change in the needs of the agency responsible with taxing. In case governments find it hard to finance its activities, it can increase the tax percentage it collects in order to get more revenues. It is thus important that you access updated information from the local authorities and municipalities.
Ensure you know the property tax rates charged by other local agencies. On top of governments, there are other local agencies that depend on the amount garnered from taxes. Other organizations that are involved in serving the local populations as well demand a portion. Local entities such as cities and towns need taxes from local people.
Total the tax rates then multiply the value by the worth of the property. After knowing all the property tax rates you are needed to pay, add the various tax rates to obtain the total property tax rate you need to pay. Take the total rate of property tax and multiply it by the much your property is worth. The figure displayed is your total property tax.