How Are Property Taxes Calculated?

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Property taxes are taxes assessed on real property, real estate and the improvements made on land, such as the addition of buildings. Learn how property taxes are expressed as a percentage of the appraised value with information from an independent CPA in this free video on property taxes.

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Video Transcript

My name is Miranda Chook and I'm a CPA. We're going to talk about property taxes. Now property taxes are taxes assessed on real property, real estate, and the improvements to that land such as buildings. Property taxes are typically expressed as a percentage of the appraised value or sometimes it's a dollar value per thousand dollars of appraised value. Now the appraised value is typically given by professionals that are hired by the taxing authority such as the county in which you're living. Appraisals are conducted by professionals that are hired by the taxing authority such as the county. There are also exemptions that are sometimes available such as if you're a homeowner, in certain jurisdictions there are exemptions available to you that will reduce your appraised value and therefore reduce that base amount on which your property taxes are calculated. So check on those because sometimes they're not automatic and you actually have to apply for them. Now keep in mind that when you get property tax bill sometimes there are special assessments that are also included there. There aren't really officially property taxes, and those special assessment taxes are usually just set dollar amounts, sometimes they're percentages and they're usually out there for specific projects such as community colleges, or parks, or mosquito abatement. Now property taxes are not necessarily stagnant, even though the percentage itself may not change, the appraised value may change not only due to a reappraisal, for example if the property has not changed hands due to a sale but because each year the appraised value may increase and sometimes by law they only increase by certain percentages but in general your property taxes will increase from year to year.

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