BobL43
DIY Senior Member
Actually, here the general real estate tax, or (ad valorem tax), is made up of the taxes levied on real estate by various govn bodies and municipalities. These taxes are known as ad valorem it is Latin for "according to value" taxes because the amount is based on the value of the property being taxed. General real estate taxes are levied for the general operation of the govn body or agency authorized to levy the tax. These taxing bodies include:
counties, cities, boroughs and townships
school districts or boards
drainage, water and sanitary districts, and
municipal authorites operating parks, forest preserves and recreational districts.
Historically, real estate taxes have been the principal source of revenue for local govn in most states, including mine. Real estate taxes are one of those certainties in life that property owners just cannot escape. Ian, rising costs of govn coupled with increasing costs to operate and maintain real estate , however, have raised debate over the fairness of real estate taxes. Homeowners argue, that the ownership of a basic necessity does not connote affluenece or wealth. Furthermore, real estate tax bills are not tied to the owner's income or ability to pay. This is especially problematic for people living on fixed incomes. Property owners also often argue that they are paying for services such as public schools, they do not personally use, which is something to which I do agree to.
Some states, such as mine, legislature has attempted to alleviate the dependence on real estate tax by permitting local govn bodies to collect sales or income tax in lieu of real estate tax. However, few taxing bodies have embraced these alternatives. Recently, legislators made yet another attempt at tax reform when they passed Act 72 in 2004, which some of you might remember; the slot-machine gambling legislation. This would funnel money generated from the newly legalized gambling to local school districts. They, in turn, would reduce property tax bills to homeowners. The Act also requires school districts to increase local income taxes and to place on ballot for voter approval certain proposed property tax increases.
Now, here there are certain exemptions from taxation in most states. Common exemptions are granted for property owned by
city, state and federal govn
munipal authorities
education institutions
hospitals
religious institutions and
public charities
As simple as this sounds, it is not, the laws as usual are fairly complex. I actually know someone who tried to be exempted by stating their home was actually, a religious institution because they prayed at meal time. Some states will allow special exemptions to reduce real estate tax bills for certain property owners or land users. For instance, senior citizens, ( yes Ian the elderly) are granted reductions or limited increases in assessed values on their homes, known as Homestead Exemptions. These exemptions are especially important for longtime residents in neighborhoods where significant increases in property values would otherwise make the taxes unaffordable. Other temporary reductions in real estate taxes are frequently used to attract industries, stimulate economic growth and development, or encourage rehab of properties.
The assessment, or assessed value, is the official value of real estate that is used for tax purposes. Real estate is valued, or assessed, for tax purposes by county assessors, evalutors, or appraisers. This is what I do. Assessments are normally a percentage of the property's fair market value. Depending on the type of property and the taxing jurisdiction within which it is located, one value may be assigned to the total property or separate values may be assigned to the land and the building.
A property owner who feels that the county made an error in determining the assessed value of the property may appeal the assessment. In some jurisidictions, when it is necessary to correct general inequalities in statewide tax assessments, an equalization factor is used to achieve uniformity. This factor may be applied to raise or lower assessments in a particular county. The assessed value of each property in the area is mutliplied by the equalization factor; the tax rate is then applied to the equalized assessment. For instance, if the assessments in one county are determined to be 20 percent lower than the average assessments throughout the rest of the state, the underassessment can be corrected by applying an equalization factor of 120 percent to each assessment in that county. A parcel of real estate assessed at 98,000, for example, would be taxed on an eqalized value of 117,600 (98,000x1.20=$117,600)
The process of determing a real estate tax rate begins with the adoption of a budget by each taxing body. The next step is appropriation. This is the way a taxing body authorizies the expenditure and the acquisition of funding. The tax rate may be expressed in mills. A mill is 1/1,000 of a dollar, or $0.001.
A property owner's tax bill is computed by applying the tax rate to the assessed valuation of the property. For example, on a property assessed for tax purposes at 90,000 in a taxing district with a tax rate of 30 mills, the tax bill would be $2,700,($90,000x0.03=$2,700).
The bottom line is, in desiring to pay lower property taxes is to find the district with a lower millage; which is why my property taxes are low. I pay 1,200 a year.
Bob, you could appeal.
Cookie, I've been in this house since 1971. Back then the taxes were 900 bucks and went up quickly to 1100. Over the years, they just kept climbing, like all of Long Island taxes did. I've been through many grievances, got several reductions, been through small claims court to get some of them. It's just a fact of ife here. What does suck though is guys like Ian suggestiong I pay higher taxes to help the poor. the guy must be delusional.
I only have a one story ranch 3 BR, 2-1/2 baths on 1/3rd acre in a working class neighborhood, no castle or Taj Mahal here. Most of my friends living on Long Island pay the same as I do or more. One pays $15K for a colonial on 1/2 acre. Our taxes ARE based on property values that are very wierd too, because the last tax bill shows my assessesd value is about 39K, although the average selling price here is closer to 300K. Used to be closer to 500K several years ago, but you know how that went.