Understanding Property Tax

All homeowners are required to pay property taxes. But how deep really is our understanding of these taxes? Sure we know that they depend on the value of the property and the tax rate at the time. However, are there other important information about them that we should be aware of?

Real versus Personal

There are two major categories of property: real and personal. Generally, real properties include land and other immovable features built or installed on it. Some examples of them are houses, apartments and shopping centers.

Meanwhile, personal properties are those that are not covered by the real category. They can be any items that are not attached to the land and are oftentimes mobile. For instance, livestock, cars and computers. But for clarity sake, real properties are further divided into two subcategories: tangible and intangible. Falling under the tangible group are physical objects such as those mentioned above, while under the intangible group are physical attributes such as patents and copyright.

It is essential to know these things and the categories where they belong because the rates used for taxing them vary.

Property Tax

Now, you must be familiar with the tax on your residential property. This, as you must know, is that tax charge yearly on your primary residence. This is calculated by determining the market value of your property, the applicable deductions and the tax rate. Once you have taken away the necessary deductions from the market value, then the result will be multiplied by the tax rate.  Keep in mind that the tax rate and the applicable deductions depending on what state you are in; which is why it is recommended to call your local tax officer.

More often than not, you can file a tax appeal during the reassessment of your property. If you feel that your property has not been assessed properly, it is probably best to consult a property tax lawyer or a tax consultant regarding your concerns.

Exemptions and Incentives

Yes, there are also exceptions in property taxes, thus you might want to verify if you qualify for them. Usually, senior citizens and the handicapped are off the hook.

Similarly, you should also be in the know when it comes to different tax incentives of the properties you have. Confirm if you qualify for any of the incentives offered by the government to first time buyers. If you are in the dark, then better consult your property tax lawyer about this.

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