In the US, property tax rates differ from State to State and locality to locality. These taxes are the source of finance for counties, municipalities, or local governments, as the case may be. Such governing bodies are responsible for providing required infrastructure such as roads, power supply, water, gas, police protection, free medical facilities, schools, etc. Therefore, facilities available at a place have a direct impact on the rate of property taxes of that locality.
Apart from such facilities, other factors such as appreciation in land value and any improvement in building adding to the value of property also result in higher property tax rates. The size of the property, quality of construction, age of the property, etcetera are the usual factors that are considered while assessing the rate at which the property is to be taxed. Commercial properties are taxed more than any residential properties. Property taxes may also be levied on different types of business properties. In some jurisdictions, personal properties are also considered for determining property taxes.
Usually, the local government is the administrative authority for such taxes. There are local officials who assess such taxes based on the fair market value. In general, property tax rates applicable for homes in US may range from 0.2 percent to 4 percent of the property’s market value. For the purpose of this ratio, annual fair market value of the home is taken into consideration. This fair market value is often based on some recent unrelated sale of similar property in such locality. There are alternate methods as well for determining this fair market value. One of the important adress in US is the Department of Revenue
The income that the property can generate may be considered for assessing the property taxes. Depreciation in value of the property is also a method adopted to arrive at the market value of the property. The assessing officer intimates the revision of property taxes to the property owners. Property owners, however, are not obliged to accept that valuation or tax assessment. They may present their reasons to a review board of the local authority, and obtain a revision. Property taxes or part of the property taxes may, at times, be charged and collected by the State Government. In such cases, the property owner has to dispute the proportionate amount with the State Government’s property tax office. In some places, property owners assess their property taxes, but such cases are rare.
Almost all states also collect property taxes on any motorized vehicle that the person may own and register in the US. Property tax in US is payable for varying intervals. Such taxes are legally enforceable taxes linked to the properties.
This means any new owner of the property continues to be liable for any existing property tax liabilities. In other words, any sale of the property does not exhaust the liability. These taxes are also payable on or before a specific date. In the event the property owner defaults on such legal obligation, then the authority as the case may be can take possession of the property and auction it for recovering the dues, if any.