Everything You Need to Know About Local Property Tax Laws

Everything You Need to Know About Local Property Tax Laws - Homeclarity™

Tax season—unless you are the tax collector, you are dreading the arrival of tax season. For homeowners, there is a lot of anxiety surrounding what is owed and when it must be paid. Below you can find current laws and regulations, broken down for quick and easy property tax understanding.

How Much in Property Taxes Do I Owe?

Your property tax bill is adjusted every year based on a predetermined tax rate formula. The tax rate formula, or multiplier, is used to ensure tax revenue is sufficient for the local governments and other jurisdictions annual budgets. Depending on the location of your house, there will be several different taxing authorities (municipalities, counties, etc.) factoring into your tax rate formula.

Am I Eligible for Property Tax Exemptions?

Property tax exemptions are used to reduce taxes for certain types of homeowners. It is important to note that eligible homeowners must apply to receive these exemptions and, qualifications vary depending on your location. Here are the most common tax exemptions:

  • Homestead. This exemption is for owners who permanently reside in the property. For example, if you own a vacation home in Florida, you do not qualify for the homestead exemption in Florida.
  • Age and disability. Seniors and the disabled can qualify for property tax reductions. Qualifications, such as what age is considered to be senior, varies from state to state.
  • Public service. Military veterans may qualify for tax exemptions and these exemptions may continue for widowers or parents of military members.

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When are Property Taxes Due?

If you do not know when your property taxes are due, stop right now and figure out your local tax authority’s payment deadline.

Most states have different tax deadlines. As a homeowner, knowing your jurisdictions deadline can be the difference between paying only the property taxes or paying taxes with added fees and interest. These deadlines are strict and failing to pay property taxes in a timely manner has major financial consequences.

What Happens if I Don’t Pay My Property Taxes?

As soon as a payment deadline is passed, the debt begins to collect interest and penalties can be added. This delinquent amount becomes a lien on the house. Tax liens take priority over other liens, including mortgages. The taxing authority will eventually hold a tax sale, not unlike a foreclosure sale. The purchaser of the tax lien buys the right to collect the debt and interest. If delinquent amounts are not paid, the lien holder can foreclose and assume the deed to the house. Needless to say, it is important that homeowners understand all local and federal tax laws.