Keep in mind that property taxes are the local governments’ primary sources of revenue. For this reason, whenever the local governments are in need of additional funds, such as when the state cuts its budget for the counties, the homeowners will likely shoulder the burden – and, thus, the high property tax on your home.
The annual property tax is an obligation that property owners must comply with, particularly in paying it within the deadline imposed by the county tax commissioner. Property owners then have the right and responsibility to know the basics of property tax and, thus, beat the local tax authorities at their own game, sort of.
Calculation of Property Tax
The property tax bill, which is issued and collected by the county tax commissioner, is based on the subject property’s assessed value, the applicable exemptions on it, and the tax rate imposed by the local taxing authorities. The formula can be expressed as: (Assessed value – exemptions) x tax rate.
The property’s assessed value, in turn, is determined by the county tax assessor – or more appropriately, by the county’s staff assessors, perhaps even by authorized third-party appraisers in certain instances. The property assessment process can be done on an annual basis or only in certain years, such as every three years. The annual notice of assessments, however, are issued every year – and every year, you can appeal the property assessment value with the Board of Assessors in your state.
The assessed value is usually a percentage of the fair market value, as determined by the county tax assessor’s office. In the State of Georgia, for example, the fair market value is multiplied by 40 percent to arrive at the assessed value.
Factors Affecting the Tax Bill
The tax levied on a real property will depend on several factors including but not limited to:
- Its classification, either as a residential or commercial property, since these are assessed and levied based on a different criteria;
- Its uses, such as a primary residential or a second (i.e., vacation) home; and
- Its type of structure including the additions to the main structure, such as pools, gazebos and sheds in case of residential property
While the assessed values of the real property being taxed will be different for obvious reasons, these should be taxed at a uniform rate. This means that the multiplier – or tax rate – should be the same for all the real property classified in the same category.
Bear in mind, too, that there are controllable and uncontrollable factors that affect property taxes. To mention a few of these factors:
- Home additions and renovations (interiors) and improvements in the front and back yards (exterior) including additional outdoor buildings
- Decrease in state allocations for the counties, increase in public employee benefits, or increase in the costs associated with the delivery of basic services
- Improvements in the neighborhood that increases the value of real property in the area
When you see a high property tax on your next tax bill, you can start looking for what went wrong from among these factors. It may be that the assessed value or the tax rate increased. It may be that your neighborhood values increased because of recent developments in the area. Whatever the reason, you can discuss it with Fair Assessments, LLC.