Most first time buyers are not that familiar with property taxes which can make buying or selling a little scary. Owning a property, either residential or for business, requires the property owner to pay property tax on the assessed value of a property or value of the land and buildings. The tax will be distributed if the property is sold to the previous and the new owner of the property based on how much of the year they owned the property. As a good start to home ownership, homeowners should be comfortable when it comes to tax related issues.
The amount of tax is based on the value of a real property and it is a levy issued by a government on the person’s real estate property. Then the property is appraised to get the value. The value is taxed by multiplying the fair market value of the property the current tax rate. property tax is imposed in counties, cities, towns, villages, districts, and so on because the money generated is generally used to fund schools, maintain roads, pay for the police, and support other services which all residents could enjoy.
There are cases where property tax can increase, but more often that not the value remains the same. Conversely, the tax amount may change depending on the reassessments made. Main home improvements like building an additional structure to your home can be a reason for reassessment. Consequently, the property tax levied can increase.
Although payments are normally done annually, property tax payers can pay by periodic installments, either quarterly or monthly basis. Typically, commercial properties pay quarterly while homes are charged monthly, which is normally added to mortgage payments.
Since forms of property taxes differ in countries and jurisdictions, it is wise for a home buyer to consult the appropriate regulatory board or a professional for the laws specifically applicable to properties that you want to buy, sell, or invest in.