Property taxes are a major source of income for local governments, comprising 72% of local tax collected. Property taxes typically fund your local schools and libraries, emergency services, roads, and parks and recreation department.
Before you receive your property tax bill, you should receive your home’s value. This value is determined by your tax assessor and is typically calculated once a year, or once every five years, depending on the local laws. To determine the amount of property tax you owe, the tax assessor will calculate your home’s value by the local tax rate, often called a mill rate. The mill rate is set by the town or city when determining the amount of funding needed for the services detailed above.
Property taxes may be higher than average if a state does not impose a sales tax or a state income tax. Property tax rates can also vary within a state with towns determining different tax rates. For those paying higher than average property taxes, the community is likely to have great services, despite the high cost.
Paying your property tax can be arranged with your local tax office in annual or semi-annual payments, or through your monthly mortgage payments. Veterans, senior citizens, and other individuals may also qualify for a reduced property tax rate.
Learn more about Property taxes here.