Personal Finance

Taxes on property

Property tax, or taxes on property, is a tax which an owner of a real estate or any other property has to pay to the government for their ownership. The amount of the property tax is calculated by checking the current market rate of the property. The taxing authority conducts an appraisal of the value of real estate or personal property, and the tax is calculated in proportion to the original value. Taxes on property serve as a major revenue source for fire protection, public libraries, public schools, and parks.

In most states all personal property and real estate is subject to tax unless specifically exempted by law. Taxes on property are generally assessed by local government, at the municipal or county level. The tax assessor, a public official, ascertains the property value for apportioning the tax levy. In most cases the county assessors appraise the property value at 100 % of its fair and original market value in money, based on the maximum and excellent use of the property. The original value or fair market value is the amount which a willing buyer is ready to pay for a willing seller. Generally, the assessment of the property is calculated using one more of the common appraisal methods (that is market value, income approach or replacement cost).

Real property consists of land, structures, some equipment attached to the structures, and improvements to land. Personal property comprises of machinery and equipments, furnishings, supplies, fixtures, and tools. Mobility is the main characteristic of any personal property. One has to pay personal property tax when conducting any business or to any other personal property unless exempted by law. According to the law, the personal properties owned by individuals are exempted from tax. But if the personal properties are used for business purposes, then you have to pay personal property tax. The law mandates to complete a personal property affidavit for those individuals who uses personal property for any business purpose or has any taxable personal property. The tax rates of personal property and real property are same. The frequency of changes of your property value is based on your country’s revaluation cycle. If you have any dispute with the new appraised property value you can contact your local county assessor’s office.

The real property is revalued by the assessors once in every four years to change the property tax. In certain counties the properties are subjected to revaluation every year and need physical inspection once in every six years. The local county assessor will send you a “change of value notice” if there are any changes in your appraised real property value. The notice states the old apprised value and the changed new appraised value of your property.

Taxes on property can be paid to the county treasurer’s office where your property is located.