- Does Paying Overdue Property Tax Mean You Can Get a Title?
- Are City Property Taxes Deductible on Your Federal Tax Return?
- How to Compute Prorated Property Taxes
- How Much Will Property Taxes Go Up for Adding a Bedroom?
- Questions About Paying Property Taxes
- How Much of a Tax Break Do Seniors Get for Property Tax?
The act of imposing a tax on someone is known as "levying" a tax. Property tax is a tax based on ownership of a piece of real estate. A "levied property tax" is a tax imposed on property owners, based on the value of their property and the municipal government's needs. Property taxes are generally due once or twice a year, and failure to pay can result in serious consequences.
Property tax is an "ad valorem" tax, meaning it's based on general ownership, not a specific transaction. Each property owner will need to pay tax on their property, usually to a county tax collector (though towns and cities may sometimes assess property taxes themselves). Traditionally, counties use the money from property tax payments to provide specific amenities for their residents, such as roads, schools, police, firefighters and garbage pickup.
Your property tax payment is typically determined by two factors: the assessed value of your property, determined by the county assessor's appraisal, and the county's needs. County residents often vote on which services they will implement or cut, and such votes directly influence the amount a county requires to raise from property taxes. The county determines how much money it needs to provide services, takes a look at the aggregate value of the real estate within its jurisdiction, and imposes, or "levies," property tax in a percentage that will raise the needed revenue. This percentage is then applied to the assessed value of each homeowner's property to determine the amount she must pay. Consequently, the amount of property tax levied on a particular piece of property can fluctuate from year to year, depending on the property's valuation and the county's needs.
Every property owner is liable for property tax. If you don't use your property, or if it generates no value for you, this may affect the amount you owe (depending on your county's tax laws), but you will still need to pay taxes based on the value of the property. Generally, the county or other local authority will mail you a property tax statement at least two months in advance of the payment due date. If the amount is more than you can pay, many counties offer payment arrangements, such as a two-payment installment agreement.
Paying your levied property tax on time is important. In addition to the government's ability to impose a tax, the word "levy" also refers to the government's power to seize property to satisfy the value of taxes you haven't paid. A levy of this kind may be imposed on any kind of property, including real estate. While a brief failure to pay property tax usually results in only fines, interest or other penalties, if the tax remains unpaid long enough, the county may have the power to levy, or seize, your property as a substitute. In such cases, the government usually sells the property and keeps the proceeds of the sale in lieu of the taxes you didn't pay.