Archive for the ‘Appraisals’ Category
The Good And The Bad About Property Tax
Property tax is probably the fairest tax collected by municipalities. Property tax is also probably the unfairest tax collected by municipalities.
The state where an individual lives determines how much they pay, which may be higher or lower. An individual’s economic status can also be a factor in how a property tax impacts their pocketbook.
In fact when it comes to property tax, renting versus owning may be the only time renting is the best option. States collect property taxes on:
Land
Improvements to land such as additions to property
Man made objects that are not stationary structures
Property tax is usually assessed by individual county tax collectors in each state. Land and property are mailed tax payment notices that are the result of appraisals of the property’s value. Notices of property tax assessments can be disputed by contacting the tax collector in the land owner’s county, and property tax is typically paid from a homeowner’s escrow amount on their mortgage.
As mentioned, property tax can disproportionately affect some homeowners. Increases in a state’s property tax can often double or even triple a homeowner’s tax liability and often leave them with no option but to sale their residence or land.
Critics of the property tax have also decried the fact that it does address the situations of some individuals. Although property tax is ordinarily paid as part of an escrow account, increased property tax means they would have to pay more into escrow.
Senior citizens on a fixed income have been identified as a group sometimes hit hard by property tax. Such individuals may have high property tax due to an increase in the value of their property, yet find themselves unable to pay because of a reduced income during retirement. Property tax, in some cases, does not take into account factors that may impact someone’s ability to pay property tax such as personal tragedy or acts of nature.
Property tax has also been criticized because of the difference individuals must pay between states. Alabama has the lowest propery tax at 1.3 percent on property value, while New Hampshire has the largest at 4.9 percent. The average percentage among is somewhere in the range of 2.3 percent.
While Alabama has a property tax rate of 1.3, which would seem to make it an attractive location for a home or business owner, someone with property a few feet away in neighboring Georgia would have to pay 2.6 percent, and more than double in Florida with a property tax of 3.1 percent.
Just how to spend the revenue (or waste it, as is the case with many governments) generated by property tax is determined by state legislatures. A state’s legislature also has say over reducing or raising a property tax along with determining how often it should be collected. Additionally, there may also set limits on how much increase, if any, there can be every year.
Property tax definitely helps states with revenue. But while much needed, property tax can also be a deciding factor in where an individual lives or their ability to retain the American Dream of owning land.
Harvey Waldman is a government employee who would like to impart his knowledge about federal taxes, including property tax. According to Mr. Waldman, there are several ways that you can go about doing your taxes. You have the choice to either doing them yourself or using the services of a company or a professional accounting and tax consultant to do them for you. He highly recommends this complete tax guide site, which you can find at http://gov-taxrelief.info.