Real Estate For Beginners: Residential Property Taxes
Whenever you own a piece of land, you will be taxed for it. Whether it is commercial property or residential property, there is still a tax to pay, whether it is for a village, town, city, county, or state. Most residential private property taxes are handled on the local level, going no higher than the county. Depending on the nature of the business, it may be handled by a variety of entities, including state and federal agencies. Each specific area and state has its own way of levying property taxes. This article is intended as real estate for beginners and will focus on property taxes as they relate to residential private property. Your Credit Union financial advisor can also provide a good deal of valuable information; call today to schedule your free consultation.
How property taxes are used. Each locale uses the revenue earned from property taxes for different purposes. It can be anything from road repairs and utility upkeep to firefighter salaries and emergency response. Most areas, however, use the money received from property taxes for school districts. Taxes are levied and then distributed to schools in a district according to the amount of money received from property taxes. This often puts homeowners in a bind, as most of them want quality education for children, but are reluctant to vote to pass measures that will result in a property tax increase.
How property taxes are determined. Before buying a home, it is important for real estate beginners to understand how the amount you pay in property taxes is decided upon. Everyone pays a different amount, depending upon how much a home is worth. The tax rate for an area is the same throughout that area, but due to varying home values, the property tax you pay may be a little higher or lower than your neighbors.
If the property tax rate in your area is 9 percent, and your home is assessed at 250,000 dollars, your yearly property tax would be 22,500 dollars. If your neighbor