Property taxes are necessary to maintain a neighborhood and provide vital services to residents. Real estate taxes are a levy against real property by a local government collector. Property owners who do not pay the taxes can lose their home in a tax sale or tax lien foreclosure by the imposing government authority.
The amount of tax a homeowner pays is determined by the property's assessed value and the tax rate being used by the local tax authority. A local government assessor's office is responsible for setting the tax rate in the area and assigning values to each piece of real estate. The home's worth is based on multiple factors, such as age, size and the prior year's assessed value. A home can be reassessed if the neighborhood improves or if improvements such as a new garage are made to the property. A higher assessment causes property taxes to increase. A homeowner can dispute the assessed value on the property tax bill with the issuing agency.
Property Tax Types
Property taxes are collected by different authorities in the same location. The tax bill generally lists where each percentage of the total tax owed will go. Counties, cities, towns, villages and schools can collect property taxes. The government agency receiving the tax then distributes the money to other entities and programs accordingly.
The property tax money is used to provide services and maintenance and upkeep of the area. Park supplies and maintenance crew expenses are common uses for taxes. The first responders in the area, such as the police and fire departments, receive property tax funds to continue to provide services. Community enrichment programs can receive tax funds from the area being served.
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