How Is Land Assessed for Property Taxes?
All real property is taxable. The only exceptions are church-owned property, government-owned property and some veteran property. Tax liabilities are determined by a number of factors and are subject to change as often as quarterly. All homeowners should know how and when they're property taxes are administered--especially if their taxes are paid through their mortgage company.
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Tax Rate
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The municipal and state tax rate determines the final cost of property taxes. These are usually determined by the state legislature and amended as needed by municipal governments. Property taxes are adjusted based on the needs of a town. For example, if a town is struggling in an economic downturn, higher rates may be assessed for a two-year period.
Assessment
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All properties in a town must be assessed before they are taxed. This is similar to an appraisal. Essentially the city or town government must find out the estimate worth of a property--both the buildings and land contained within the property limits. Assessments are conducted by assessors, or government agents (either appointed or elected), who carry out unbiased reviews of all city properties.
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Fair Values
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A property assessment should roughly be the value of the home. Some assessors use online tools to help them value town properties. One of these sites is www.Zillow.com. Homeowners can dispute assessments by filing a complaint with their city council at town hall.
Calculations
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Calculating a tax bill is a bit complex. The town assessor must first determine the total taxable assessment of the town (the sum of all property assessments). They then must determine the tax levy, or how much the town must raise to meet the tax rate.
For example, say a home in a town with a value percentage of 10 percent is assessed at $200,000. The assessment percentage is $20,000. The assessor then figures the tax rate. Say the town's total taxable assessment is $10,000,000 and its tax levy is $1,000,000. He would divide 1 million by 10 million to reach 0.1. This is multiplied by $1,000 (town's assessments are based on each $1,000 of every taxable property). This calculation results in $100. This number represents the town's tax rate.
To find the tax bill of the house in this example, the assessor would divide the home's value percentage ($20,000, see above) by $1,000: $20,000 / $1,000 = $20. This is multiplied by the tax rate ($100, see above) to get the tax bill: $20 x $100 = $2000. The tax bill for the home in the example is $2,000.
Apportionment
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When a school building falls on a county or town line, a tax assessor often must apportion the total tax levy. This is handled between the tax assessors from each town. They equitably divide the total assessment value of the school (or other government building), and then add these numbers to their town's total tax levy.
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References
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