Various jurisdictions have different methods of calculating property tax, but the basic method involves multiplying a home's market or assessed value by the rate provided by the local government, states the TurboTax website. Local governments levy property taxes as a method to generate revenue.Continue Reading
Local governments consider the market values of all homes in a given area to assess each individual owner's property tax bill, states the TurboTax website. Jurisdictions designate a specific department to handle all matters related to property tax assessment. This department, often referred to as a town assessor's office, determines the market value, which is the price the seller could obtain by selling the property on the open market.
In some instances, a jurisdiction users the assessed value, which is a percentage of a market value. Each individual governing tax authority has a formula to determine the assessed value. Each state has a number of property tax districts that establish appropriate property tax rates based on financial needs for that period, notes the TurboTax website. Generally, the budget deficiency within that state serves as a basis for property tax calculation. Multiply either the market rate or assessed rate by the property tax rate in that area to find out how much you owe in taxes for that particular period.Learn more about Taxes