Q:

How do you calculate home property taxes?

A:

Quick Answer

Home property taxes are calculated based on an assessment of the related real estate, notes About Money. An assessor determines the value of the specific property, and the applicable rate is then multiplied against this value to determine the tax liability.

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Full Answer

Property taxes are assessed at the local level and vary from one jurisdiction to another, notes the Tax Policy Center. The property tax is unique, considering the basis for which it is calculated can periodically fluctuate. Real estate values are dependent on various economic conditions, and jurisdictions may adjust a property tax rate with this consideration.

Governments provide incentive for investment in property. For instance, in the United States, taxpayers can deduct the amount of property taxes paid on their federal return, as noted by TurboTax. Property values are assessed every one to five years. While the tax obligation is due annually, most local governments allow for monthly installment plans, as specified by About.com. In addition, government proceeds from property taxes must be used for general community purposes and not for the rendering of a service, notes the Internal Revenue Service. Local governments, school districts and individual counties rely on property taxes paid by residents as a means of funding daily operations, notes the Tax Policy Center.

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