Property tax is an obligation mandated by law that every real estate owner must pay. It includes both the land and the value of your property. One caveat that comes with property taxes is that it changes every year.
The rate of your property’s tax isn’t fixed because neither is the value of your property. There are also instances where events happen where your property is located that increases it. The rate is dependent on these two factors, and changes to either can drive the tax up.
This tax is generally due annually, so it’s essential to prioritize it like your mortgage and insurance (if you have one). You should know what causes it to hike up so you can be prepared when it’s time to pay for it. This article lists down the things that can add to your property tax.
Extensions, renovations, and remodeling can increase your property’s value, therefore increasing the tax you have to pay. Any home improvement projects that you do regardless of scale can add up to your annual property tax. Regardless if you did it for leisure or function, it could increase the tax.
Even small remodeling projects can change the value of your home, but all the more so for larger ones. An exterior improvement project such as constructing a new garage or building a new pool house are a few dramatic exterior projects that will definitely increase your house’s value. It’s also more evident since you did it as part of your house’s exterior.
On the other hand, interior improvements like adding a home office or remodeling your kitchen or bathroom will take longer to be factored into your home’s value. It will eventually, and it will also lead to a tax increase. It’d be better if you seek help with property tax consulting firms to see if your planned renovations are worth more than the possible tax it’ll cost you.
Improvements around you
Positive changes around your neighborhood can also affect the value of your property. Residing in an area with desirable surroundings gives the image of having desirable properties. The better your neighborhood is, the higher your property tax rate will be.
The construction of new amenities within your side of the town also contributes to your annual property tax bill. Home improvements by your neighbors do that as well. As long as there’s visible progress around you, your property tax rate will remain indefinite.
As a product of living in such an attractive community, home sales may also improve. That also has an effect on your possible property tax rate. More residents coming in to buy occupy real estate to live in, the more your neighborhood increases in value.
State and local budgeting
The government uses your taxes to fund projects and services for you, the citizen. Property taxes are no different because they’re the source of funding for such projects. Officials’ decisions involving state and local budgeting may be reflected in the assessment of your property’s value.
Cutting back or withdrawal of funding on services will mean the need to find another source of subsidy. One of the ways that can be done is to let the citizens shoulder it through the annual payment of property taxes. Since its rate isn’t definite, your state or municipality can gain more from it, depending on how well things pan out.
The state also determines your property tax rate. Some states establish limits on how much they can charge, while others even resort to double-digit tax hikes. It may be a pain just thinking about it every year, but keep in mind that they go to funding schools, hospitals, water and sewer authorities, and all other essential public services that you and your fellow citizens need.
For first-time property owners and people who just bought a new one, you may be subjected to pay supplemental tax. It’s a fee covering the difference between the old assessed value of the property and the new one. The new assessed value is the result of the reassessment done after you receive the property deed. It’s an increase in expenses you should know, even though it isn’t an actual addition to your property tax rate.
William Ross may not be a lawyer by profession, but he’s one of the sharpest writers out there when it comes to property tax and valuation. Armed with considerable knowledge and gifted with impeccable writing skills, he can surely deliver engaging property-related content.