What You Should Know About Property Taxes

Property taxes are a significant part of owning real estate, and it’s important for every property owner — whether you own a home, commercial property, or land — to understand what they are and how they’re calculated. Let’s break down the basics so you can make informed decisions about your property.

What Are Property Taxes?

Property taxes are annual fees assessed by local governments — typically at the county, city, or district level — to help fund schools, roads, public safety, parks, and other community services. The amount you owe depends on two primary factors:

1. Your property’s assessed value.
2. Your local tax rate.

Understanding Assessments

An assessment is an estimate of your property’s market value. Local tax assessors look at factors like recent sale prices in your neighborhood, your property’s size and condition, and improvements you’ve made. It’s important to review your assessment carefully because any inaccuracies — like an incorrect square footage — could result in a higher tax bill.

If you believe your assessment is too high, most local tax offices allow you to file an appeal. That process typically requires you to provide evidence, like a recent appraisal or comparable property sales.

How Local Budgets Affect Taxes

Your local government sets its budget each year, and property taxes help make up the revenue they need. Once they establish their total spending, they set a tax rate — often expressed as “millage” — to cover that amount. Even if your assessment stays the same, an increase in the tax rate can make your tax bill go up.

That’s why it’s smart to pay attention to your local government’s budget meetings and stay informed about tax rate changes that could impact you.

Need Help Navigating Property Taxes?

Property taxes can feel complicated, especially if you’re new to homeownership or real estate investing. Whether you have questions about your assessment, budgeting for tax increases.