Regardless of whether you have recently bought your very first property or have been living in the same property for decades, what you are always going to need to consider is the amount of tax you pay on your property every year. If you are unsure of where to start, this is your ultimate guide to paying tax on your property.
Why paying tax on your property is important?
Property tax is a tax that is set by local Governments and is done as a way for them to get revenue. Like other forms of tax, this can be spent by the Government to go towards improving the area. They are important to pay, as if you don’t, the local Government can impose a tax lien on your property. This is where they will claim your property, and if the tax isn’t paid within twelve months, a certificate is then made with the amount of unpaid taxes. These are then sold either to individuals or investors, and this is done to ensure that these unpaid taxes can be monetized. Once this has been done, those who have purchased these certificates may possibly possess your property, which can then lead to them having ownership rights over it. So, if you want to avoid this from happening, you are going to want to keep up to date with your property taxes.
How is the amount of property tax to be paid decided?
When it comes to properties in the USA, these are decided at a local level, which means that each state will decide how those who live there are taxed on their properties. However, the amount of tax to be paid on each property via state can vary from 0.2-1.9%, which is quite a large variation. This is worth bearing in mind, particularly if you are thinking of moving and there isn’t necessarily a specific place that you are needing to move to, as you could end up paying more money in property tax than you need to.
How do property taxes vary by state?
There is a complete variation in how much property taxes are by state. For example, one of the lowest amounts of property tax by the state is in Alabama, where they only pay 0.41%. This means that assuming you were to buy a property there for the average price of $142,700, you would have to pay a property tax of $895. However, on the other end of that is homeowners in Texas. You might find that you’re asking yourself how much are property taxes in Texas? The answer to this is 1.80%, which means that as the average property price in Texas is $172,500, you would be paying a property tax of $3907. This is worth bearing in mind as if you don’t have to live in a specific state. You might prefer to live somewhere that has lower property taxes as opposed to higher ones to help save yourself money.
Found this article helpful? Awesome! Then, check out the rest of our blog to read more articles on finance solutions, business tips, job sectors, home remodeling, and much more.