Paradigm Tax Group has many well qualified experts in real estate property taxes, who are ready to assist you with any questions you may have. Real estate property taxes can be a very complicated concept to understand. We are here to help you understand exactly what real estate property taxes are and how they affect you as a property owner.
Real estate property taxes, which can also be known as millage tax or property tax, is a government-based tax that a real estate owner must pay based upon the value of his or her property. The rate of taxation is based upon the value of the land as well as the value of the immovable, manmade objects on the land, such as a home, business, commercial building, etc. The local taxing authority performs real estate property taxes appraisals once a year, with some areas being more or less frequent depending on the area market. The appraiser will report the estimated value to the taxing authorities, who in turn will determine a tax rate in relation to this value.
Real estate property taxes are determined based on a percentage. The percentage is most commonly calculated according to the value of surrounding properties as well. For example, if the value of a taxed property is $100,000, and all of the surrounding properties are valued at $200,000, the tax rate may be a bit higher than if the property were surrounded by $50,000 properties.
The most common method of determining real estate property taxes is through the use of the traditional "millage rate." The millage rate, which is calculated at one-thousandth of a dollar, is multiplied by the property value, and then divided by 1,000. Let's say that a property with an estimated value of $500,000 is located within an affluent metropolitan area. In this geographical area, the mill rate (tax per dollar of assessed value of property) is 20 mills. The resulting real estate property taxes, therefore, would be about $10,000 per year.
In the United States, real estate property taxes are determined by the local government, usually at the county or municipal level. The assessment of property values are determined by the value of the site or land itself and by the buildings or improvements upon the land. In some states, the personal property such as vehicles, durable goods, business inventory, and even stocks can be considered in the property taxes. In other states, these items are taxed separately through related agencies, such as the Department of Motor Vehicles for vehicle taxes.
The tax appraiser visits each property to determine a fair market value. In some cases, the assessment can be done simply by driving by the property, especially if there are records from the previous year and no improvements have been made. In other cases, the assessor must physically walk the length of the property. The assessor, who may work for public, private, or governmental industries, makes a determination of value based on current market trends, current prices, and how the property will be used. For example, the real estate property taxes for a 500 ft. square building on 1 acre of land in rural America and the taxes for the exact same building and land in Manhattan would be totally different because the land and property values are more expensive in the latter location than in the former.
The tax assessor offices keep a careful inventory of information on each property within their jurisdiction, such as past and present improvements, purchases or sales of properties, and so forth. In addition, the assessor office creates and maintains area tax maps. These maps are created through the help of local surveyors, who help to determine property boundaries, utility easements, right-of-ways, etc. On any given tax map, each property is clearly defined, along with related buildings or improvements. Each property is designated by a unique parcel identifier. By utilizing the information on a tax map, the county or local assessor ensures that properties are neither omitted nor taxed twice.
Still confused? That's why you need to contact the experts at Paradigm Tax Group as soon as possible. Our team of trained professionals are former certified appraisers and tax assessors, who are eager to use their expertise to help make sure that you aren't paying too much for your real estate property taxes. We know the ins and outs of property tax, and we know how to implement certain real estate property tax deductions that can save you money at the end of the year. We can help you find abatements and exemptions that most property owners might not even know about. We take pride in our knowledge of real estate property tax information. Our goal is to make sure you are paying the bare minimum in real estate property tax, so your hard money stays where it needs to be; in your pocket.