Property Tax Assessment, Essay Example

Property taxes are taxes based on the value of a house or property and assessed by the local government. There are specific sets of rules for determining the value of real estate and a formula for computing the property tax amount. The local assessor’s and auditor’s offices retain information on property taxes and share the information with appraisers, real estate agents, and brokers.

Determining the value of real estate is the first step in determining the property tax. This is done by a licensed and certified appraiser who looks at the property and determines what the future benefits of the property are worth to the owner now. The property valuation considers economic and social trends, governmental controls, and environmental considerations, and their influence on four elements of value: demand, scarcity, value vs. cost and price, and market value. Appraisers rarely go inside the home, basing their valuation on factors of the age and condition of all buildings on the property, any economic changes between the date of sale and date of appraisal, location, lot size, landscaping, square footage of the home, best use of the property, and the terms and conditions of the sale. Taxes are then calculated by the assessed property value and the mill levy. One mill represents one tenth of a cent, so for every $1,000.00 assessed $1.00 of tax is levied. Since property taxes often fund education, transportation, and emergency services, each program determines its own mill levy. An average is then taken to be the total mill levy for the county or region. The total mill levy is multiplied by the assessed property value and that’s the property tax. For example, the transportation, education, and emergency services calculate 1.5%, 0.5% and 2% mill levies. The total mill levy would be 40 mills. So for a property valued at $100,000, the levied property tax would be $4,000.00, or $100,000 times 4.0%.

If a property owner thinks their tax assessment is wrong they can appeal to the local assessor themselves, or hire a tax lawyer or property tax consultant.