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Every homeowner has to pay property taxes every year and it may happen that some of them are overcharged. That’s why it’s highly important to maximize your returns and lower your costs.
In Sean La Rue Home Loans we understand how property taxes are calculated, and we can tell you that It is critical to make sure the appropriate rates are charged. This is the key to paying the lowest taxes possible and maximizing your returns.
Why are property taxes so important?
For any city council or state government, property taxes represent one of the big resources to pay really important services such as education, transportation, parks etc…. They estimate the money they need to pay all these services, and they based on the value of a the assessed value of a property, they make the tax rates.
Understanding how these taxes work and which deductions are applied will prevent you from overpaying.
How do we calculate property taxes?
We will know how much taxes we should pay for our home based on its value. However, what many may not know it’s that the land and the buildings on it need to be taken into account.
Assessors have two ways of calculating property taxes: using the mill levy or the assessed property value.
1- Mill Levy
The mill levy is the tax rate levied on your property value, with one mill representing one-tenth of one cent. Tax levies for each tax jurisdiction in an area are calculated separately; then, all the levies are added together to determine the total mill rate for an entire region. Generally, city, county and school districts each have the power to levy taxes against the properties in their boundaries. Each entity calculates its required mill levy, and they are then tallied up to equal the total mill levy.
2-Assessed property value
The assessed value estimates a fair value for a property based upon prevailing local real estate market conditions.
The assessor will be in charge of estimating its overall value by looking at similar properties in the market, how much the replacement costs for the property would be,etc…
So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.
Stay hungry and stay positive!
Make it a great day,
Sean La Rue