How to Calculate Property Tax
In order to appropriately budget to pay your property taxes each year, it helps to have a good estimate of how much you will be required to pay. The best way to come up with this estimate is to learn how to calculate your property tax as precisely as possible. To do so, you will need to gather some information about both your property and your local assessment rates.
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Instructions
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1
Find out the assessed value of your property, including both the land and the building itself. This amount reflects the estimated value of your property as determined by the official tax assessor and not how much you paid for it, how much you personally benefit financially from it or how much you estimate it is worth. Add the estimated values for the land and the building together, and work with this number as the total estimated value for your property in order to calculate your property tax.
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2
Research the estimated property tax rates for the coming year. It may help to use previous year's tax rates and their variances as a guide. Many local governments provide access about property tax rates, average home values and estimates for property taxes on their individual websites.
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3
Deduct any property tax exemptions that you qualify for from this total assessed value of your property. You may need to contact your local tax office to verify what deductions you are eligible to apply towards your property tax, as these tax exemptions vary by location. Common examples of people eligible for property tax exemptions are the disabled, the elderly over 65 years old and widows.
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4
Multiply your new amount for the assessed value of your property by the estimated property tax rate percentage for the coming year for each taxing district your property falls under separately. Add up the amounts for each taxing district to calculate the total estimated amount you will be required to pay in property taxes.
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Keep in mind that the amount you calculate is only an estimate and may vary significantly from the amount of property taxes you are required to pay. Official tax rates are not usually determined until the end of each fiscal year. To be safe, it is best to budget more than the estimated amount when planning to pay property taxes.
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Tips & Warnings
Hire a professional tax consultant to help you calculate property taxes if you own multiple properties or if you have difficultly understanding mathematical concepts.
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Comments
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How can the county tax you on a flat rate for tools? We list all new tools that we buy but were told by the Commissioner that they charge us $3000 for tools we buy and/or replace. Also, a flat rate for old office furniture, copier and computer-flat rate of $500....we pay taxes on this for infinity?
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Oh, and I forgot to add - Illinois is one of the states with the WORST problems in almost every financial area.
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The problem is that taxing authorities use property taxes to fund their expenditures - programs, salaries, supplies, vehicles, etc. However, their need for money doesn't fluctuate with property values. If property values go down, the taxing authority actually needs to RAISE the levy (percentage) to keep everything going. Conversely, when property values go up, the taxing authority SHOULD lower the levy - but they usually don't. They find other programs to spend the "windfall" on.
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If the value of our residential property has decreased significantly, why have our taxes remained the same. I understood it was a percentage.
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stackmeister
Aug 17, 2009
In step 4, shouldn't you divide by 100? The way I learned was: IS OVER OF EQUALS PERCENT OVER ONE HUNDRED. It seems to me that the total accessed value for your house and land would be the OF, and the rate would be the percent. The IS can be represented by an X. So you'd cross-multiply and get 100X = (YOUR TOTAL ACCESSED VALUE x THE RATE). And then you'd just divide everything by 100. 100X would become X, and then... well, you get the picture. Wouldn't that be it?
