Property Taxation of Your Home

Generally, you are required to pay taxes on the value of your land. The taxes on raw land are usually less than taxes on properties that have a home or other buildings on them. The amount taxed is dependent upon the value of the property and improvements. And, the exact amount you owe depends on the particular state and how much the land and home are worth. 

What Property Taxes Cover

The money paid in property taxes pays for the services provided by your local governmental agency. This includes road maintenance, public education, police and fire protection services, and the operation of local government offices. In some states or areas, you receive a basic property tax bill that covers all of these different services. In other areas, you may receive separate bills for property tax and for school tax. 

Determining the Amount Owed

To determine the amount owed in property taxes, the value of your land and any improvements made to that land is determined by a county assessor. Typically assessments are made when a property is first improved, such as when you build a home. If you add an addition or do other substantive improvements on the home that requires a permit, your home may be reassessed to determine if its value has increased. In addition, most local tax authorities do periodic assessments to ensure that all property valuations remain up to date so that no tax revenue is lost.

Paying Property Taxes

Property taxes must always be paid by the required deadline, even if the amount owed is in dispute. Failure to pay by the deadline will result in interest and penalties. Tax authorities may also place liens on a home or foreclose on a home for non-payment of property taxes. If you believe your property taxes are too high, you are given the opportunity to appeal your tax assessment. You must usually attend a hearing and provide solid and substantial evidence in your appeal. This evidence must prove that your home is overvalued in comparison to comparable homes in your local area.