Common Factors That Determine Your Property Taxes
If you own a home and pay property taxes, you may have noticed that the amount you need to pay often varies from one year to the next. While property tax bills are computed based on local tax rates and the value of your home, the following factors can cause your tax bill to fluctuate.
Current Market Values
Some of the most common factors that can determine the amount you will need to pay for property taxes are the current market values of your home and homes in the surrounding area. Depending on the area you live in, your home will need to be reevaluated every one to five years.
This can cause your tax rates to go up or down, especially if you made any improvements to your property during that time. Furthermore, if the current market values of other properties in the area change, taxes may be shifted from one property to another. If your home’s value is assessed as more or less than the average, your taxes will change.
Whenever you decide to improve your home, you increase its value. As such, when it is time for your home to be reevaluated, the increase in its value will also make your taxes go up. Types of home improvements that can trigger a property tax increase include room additions, finishing an attic, adding a garage or installing a pool.
Cosmetic changes, on the other hand, will not affect your property taxes. These changes can include such things as replacing a roof, remodeling a kitchen or installing replacement windows. If your home becomes damaged due to flooding, fire or another disaster, you can request an evaluation. In most of these cases, since the value of your home will decrease, your taxes will be lowered.
Changes in township, city or county budgets can also affect the amount of money you will need to pay for property taxes. Each year, the township, city and county where you live assesses the needs of its citizens and adjusts its budget to meet those needs. Budget changes can include, but is not limited to, the needs of local school districts, hospitals, highways and construction projects.
Changes in State and/or Federal Aid
Occasionally, the aid that state and/or federal governments give to local or county jurisdictions can change. Typically, if there is a decrease in aid, your taxes will be higher. Programs in this category include food stamps, Medicaid, Community Justice Aid, Community Health Services and Homestead and Agricultural Credit Aid, among others.
Your state and federal governments also require your local government to provide various services to its citizens. These are known as state and federal mandates. When the needs of these mandates increase, your taxes may increase as well. Examples of state and federal mandates include child support collection (federal) and indigent burials (state).
These are just some of the most common factors that can determine how much you will need to pay for property taxes. Other things that can make your tax bill fluctuate include property tax rate changes, homestead exemptions and changes in laws regarding personal property taxes or fiscal disparities.
Anastacio Mindiola has many years of experience working in the tax industry. He works for Republic Property Tax in Houston. He uses his extensive knowledge to help lower residential and commercial property taxes.