Factors That Will Make Your Property Tax Go Up

A property tax is what the owner of a property pays as a real estate ad-valorem tax. Whether you are an individual who owns the property or an entity such as a corporation, you will need to pay the property tax, which is also considered a regressive tax.

However, many property owners have been worried and sometimes encounter difficulties in paying their property taxes. What you need to know is that property tax increases due to several factors. Below are the common reasons why your property tax will increase.

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Most homeowners that are planning to sell their home do some renovation. For example, they tend to improve their kitchen and add new spaces on their property to increase their house’s value and sell the house fast.

They do not anticipate that these renovations and add-ons on their property will cause their property tax to increase. The spaces that will significantly affect your property tax when renovated are the kitchen, the bathroom, and the garage.

If you convert your garage into another living space, another increase in your property tax is expected. This is the reason why you must be aware when trying too many things to improve your home. Unfortunately, you might not know that what you are doing is just further increasing the property tax amount of your property.

This applies to both interior and exterior home improvements, which is why you must only focus on improving or renovating the spaces that matter the most. It is best to do your research first before you start planning to renovate a specific space on your property to avoid any future problems.

These are the typical home improvements that will affect your property tax:

• A garden
• Patio
• Deck
• A golf course
• Shed
• Pool
• Attic or basement
• Porch
• Home office

This factor is something that is out of your control. Once your neighborhood improves, that makes it a more desirable place to live. Expect that your property tax will increase. As you notice, the taxes are often different state by state. This is because the amount of the taxes imposed will depend on the area.

For example, the property tax imposed in the countryside is lower compared to urban cities. If your neighborhood becomes desirable, a lot of people would want to live in that area. Thus, the property’s value will increase.

If you are wondering why your property tax has increased since you purchased your home but did not conduct any renovations and add-ons, then maybe the improvement of your neighborhood is the primary factor that affects the increase.

When the Government decides to increase the property tax of a particular area, you can do nothing but follow the new guideline. This is because property taxes, just like any other taxes, help fund Government projects and services such as schools, fire departments, police, public parks, and healthcare.

Although the residents do not have a choice but to follow this policy, there is an essential fact that all the property owners must know, and this is the fact that the Government should follow the limitation of property tax increase.

This limit varies for each city or state. Additionally, a voter’s approval is also required for a property tax increase beyond the set limit of the particular area.

Communities will periodically undergo a reevaluation of properties. Even a small beach house is subjected to this process. As such, this is where Government officials and home appraisers will review the current assessed value of each property within the community.

This reevaluation is essential to ensure that the tax burden is equally and accurately spread amongst the property owners within the community. Therefore, all the above-mentioned factors that will affect your property tax will be considered during the reevaluation.

This is where appraisers inspect your property and look for improvements such as renovations and add-ons. This is also where the new policy of the property tax set by the Government will take effect, which will be according to the community’s improvements.

It would be best if you watched out for new schools that are being built near your home. Although a newly constructed school within your community is suitable for students, teachers, and everyone living nearby, you must be aware that it also comes with a price.

The construction of the new school will need funding, and the money that will be used to fund this project will come from the people in the form of property tax. Aside from the funding needed for the construction of the school, another reason why a new school will increase your property tax is that this newly built school will attract more families to live in the community.

Property tax increases as the value of your property also increases. Now that you know what will make your property tax skyrocket, you can have a chance to avoid the said factors and make your property tax stay as it is. However, if you think that doing those mentioned above will benefit you more than keeping your property tax small, then there is no reason for you not to do it at all.

Published in: Home advice | Author: Lynn