With all of the fuss of trying to buy a home, you might not be looking at all of the lines you have to sign (in blood). You might just be so thrilled to actually own a home that you don't even care what you're signing or what it says. But when you get home and actually get to look at your contract, you might sit and think, "What are property taxes?" You're not alone. While the bank or the mortgage company should be going over each of your fees with you, you might not be listening (it's so boring, it really is). But instead of ignoring the truth behind your home purchase, it's time to find out how the property tax works and how it might also work for you.
What are Property Taxes For Anyway?
Property taxes are just more taxes you have to pay to the government. When you buy a home, its value is assessed by the county or the state you are living in and from there, you will have to pay a certain property tax. These taxes can go up and down, depending on the value of your property - as so many people have seen in recent years. As the values of homes and of properties have changed, people have noticed wide swings in the taxes they have to pay.
The value of your property is determined by an assessor and then a percentage of that value is applied to your
tax bill, which you will pay on a regular basis, depending on your agreement with the tax office and depending on the area in which you live. The property value can be reassessed if you like, especially when times are tougher in the area, so you can see a change in your property tax bill.
But where does all this money do? Property taxes are actually not just lining the pockets of government employees; these monies are going toward practical causes - public schools, fire services, libraries, and parks. So, your home is helping to keep your local area up and running. However, if you don't have children in school or you don't use some of the services your property taxes are paying for, you might have a bit of a problem writing that check.
What are Property Taxes and Their Categories?
Depending on where you live, there can be different kinds of property taxes - not just for homeowners, you know. The most common three kinds of property taxes include personal property, land property, and improvements made to the land itself. Personal property includes anything that you might have added to the land, but that can be removed. Land is, well, land - that brown stuff your house is parked on. And improvements to the land can include anything that can not be moved - i.e. buildings and other structures. All of these areas can be taxed in some way, helping to boost that tax bill.