Property taxes are a fundamental component of local government revenue and play a crucial role in funding essential services such as schools, public safety, and infrastructure. However, taxpayers are often confused (and rightfully so) with how property taxes are calculated and what exemptions may apply. If you have specific questions about property taxes in your area, we advise consulting with local tax authorities or legal professionals for personalized advice.
Basics of Property Taxes
Property taxes are based on the assessed value of a property. Assessors determine this value by considering factors such as your property’s:
- Size,
- Location,
- Improvements, and
- Comparable sales in the area.
Assessments are typically conducted periodically, with reassessments occurring when there are significant changes to the property, such as renovations or additions.
Once the assessed value is determined, local governments set a tax rate, often referred to as the millage rate. The millage rate is the amount of tax per thousand dollars of assessed value. Property owners can calculate their property tax by multiplying the assessed value by the millage rate and dividing by 1,000.
Exemptions and Deductions
There are two main types of exemption when it comes to property taxes. These include homestead exemptions and senior and disabled exemptions.
Many jurisdictions offer homestead exemptions, which provide a reduction in property taxes for individuals who own and occupy their primary residence. The eligibility criteria and the amount of the exemption vary by location.
Some areas provide additional exemptions for senior citizens or individuals with disabilities. These exemptions aim to alleviate the financial burden of owning a home on vulnerable populations.
Appeals and Disputes
Property owners have the right to challenge their property assessments if they believe they are inaccurate. This often involves filing an appeal with the local assessor’s office and presenting evidence to support the claim.
If property owners believe their tax bill is incorrect, they can typically appeal to the local tax board. If this is done, it is essential to understand the deadlines and procedures for filing appeals.
Consequences of Nonpayment
Failure to pay property taxes can result in a tax lien being placed on the property. In extreme cases, this can lead to foreclosure, where the government seizes and sells the property to recover the unpaid taxes.
Many jurisdictions offer payment plans or financial assistance programs to help property owners facing difficulties in paying their property taxes. It is crucial for individuals to explore these options before falling into severe financial distress.
Questions?
Contact The McWilliams Law Group for Help
We help individuals and businesses navigate complex IRS rules and develop appropriate strategies to reduce tax burdens. The McWilliams Law Group handles all tax law matters, including tax preparation, filing returns, IRS audits, and litigation. Our skilled tax attorneys represent clients in the Irvine area and throughout California and Washington State. Do yourself a favor and contact our gifted team of tax lawyers today.
