Real Estate - Property Tax Guide

Property taxes serve to be used for the community as a whole but they are collected on an individual basis from home owners. Property taxes vary in their collection methods and prices. They work by assessing the value of the land parcel the individual owns and the size of it is considered as well.

Many people do not know that there are a variety of types of property that are subjected to property tax. These include any land improvements such as adding on buildings, personal movable objects on the land and the land itself of course. Property taxes are not given in a flat rate but as a percentage. An appraiser is given the role of determining how much the property is actually worth. This value then gets multiplied by the property tax rate that the town, city, county, or other municipality has set per thousand dollars of assessed value. This number is then divided by 1, 000 to get the property taxes in place. In numbers, a property that has a value of $100, 000 with a property tax rate of 20 mills is going to have $2, 000 in taxes each year.

Property Tax Assessment and the Appraiser
The property needs to be assessed in order to determine its value. This is where a professional assessor comes into play by determining just how much it truly is worth. Appraisers are either employed through private agencies or can be appointed through the government. Appraisals are needed in a variety of circumstances and reasons.

Appraisers have a few different roles in their job description which include how much other homes that are similar are selling for and how much the home is worth if it was destroyed for any reason such as a natural disaster. Once these numbers are calculated property taxes can be assessed.

Terms Used in Property Taxes

Real Property - Real property includes anything and everything that is found on the land which can include the home and other structures, buildings, or improvements.

Personal Property - These include anything that can be moved on the land such as vehicles like cars, boats, and trucks and any furniture that is found as well.

Fair Market Value - This is simply the value the home is assessed at.

Assessment Ratio - This is how much of your property actually can be used for taxing purposes.

Assessed Value - This combines both personal property and real property as well that together get multiplied by a ratio. The full tax that is due is equal to the assessed value multiplied by the mileage rate.

Reassessment - If a reassessment is requested than the state has to re-evaluate how much it is worth.

Figuring Out the Property Value

Property value is something that assessors need to know how to calculate. Factors such as the location, the size of the land in square feet, and any extra amenities that are included in the assessment. Appraisers need to determine how much properties in the surrounding area are worth in order to fairly assess a specific one along with the operating costs and replacement as well.

An appraiser typically goes under one of three different approaches which include

Cost approach: Determining how much it would cost to replace
Income Approach: How much would the property bring in if it became a rental property?

Sales Comparison Approach: This method determines the assessment based on other surrounding properties recently sold

Approaches to take if you don't agree with the appraisal
Sometimes the property value that you are given from an assessor seems off so you may want to disagree with the assessment. This must be done through written channels no more than 30 days after the assessment is received. It needs to be reassessed but if it isn't done in a timely manner the tax bill is based on 80% of the value. Once the second assessment is complete, you are either given a refund for the difference or charged the extra tax.

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Lori English is a Los Angeles real estate agent, broker and internet business woman. As a web expert, she writes about Los Angeles homes for sale, as well as for other websites. With her experience, certificates, and degrees, she understands real estate, the internet business, and how to invest in properties.

Article Source: ArticlesBase.com