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One of the major places most municipalities get fundage is property tax.
Somebody from the tax assessor's office will establish a value for your property (I'm sure this varies by state) and apply the current tax rate to figure your property tax bill.
You can, in many places, protest the valuation if you believe it's unreasonably high, and there are services that help you do that for a percentage of the savings. In many cases, if there are no savings, the service is free.
There are basically two parts to this that allow municipalities to raise revenue. They can raise the tax RATE, or raise the valuations for each property.
(Texas has no personal income tax, and our legislature has reduced business tax by 25%, with the goal of having ZERO business tax within 10 years)
In my case, the valuation on my property seemed quite low. Somehow, I must have fallen through the cracks. I called the former tax assessor, who retired and formed his own tax advisory business, and he looked up my public records and agreed - "yes, you are flying so low under the radar - eventually they'll catch up and increase the valuation, but for now, I'd just be quiet".
Well, this was the year. I just got my proposed valuation or 2015 and it is more than DOUBLE what it was last year. WAY more than double. The way this works, however, is that the taxing authority is not allowed to increase the property tax more than 10% over 3 years, so they "value the property" at more than DOUBLE, but then establish a taxable basis at only 10% more than the previous year's tax basis.
With pension funds and other municipal obligations, many municipalities are looking for any place they can find money, and property taxes in many regions are soaring.
Long story short, my situation turns out rosy for me -- I'm getting ready to sell and relocate, and one of the big questions a prospective buyer would have had was "why is the tax assessment so much lower than the property appraisal or the asking price". This way, they could see that, even though the tax assessment was high, the tax BILLING is really low.
I'm just curious how this works in other parts of the country. (Or, I guess, other parts of the world)
Somebody from the tax assessor's office will establish a value for your property (I'm sure this varies by state) and apply the current tax rate to figure your property tax bill.
You can, in many places, protest the valuation if you believe it's unreasonably high, and there are services that help you do that for a percentage of the savings. In many cases, if there are no savings, the service is free.
There are basically two parts to this that allow municipalities to raise revenue. They can raise the tax RATE, or raise the valuations for each property.
(Texas has no personal income tax, and our legislature has reduced business tax by 25%, with the goal of having ZERO business tax within 10 years)
In my case, the valuation on my property seemed quite low. Somehow, I must have fallen through the cracks. I called the former tax assessor, who retired and formed his own tax advisory business, and he looked up my public records and agreed - "yes, you are flying so low under the radar - eventually they'll catch up and increase the valuation, but for now, I'd just be quiet".
Well, this was the year. I just got my proposed valuation or 2015 and it is more than DOUBLE what it was last year. WAY more than double. The way this works, however, is that the taxing authority is not allowed to increase the property tax more than 10% over 3 years, so they "value the property" at more than DOUBLE, but then establish a taxable basis at only 10% more than the previous year's tax basis.
With pension funds and other municipal obligations, many municipalities are looking for any place they can find money, and property taxes in many regions are soaring.
Long story short, my situation turns out rosy for me -- I'm getting ready to sell and relocate, and one of the big questions a prospective buyer would have had was "why is the tax assessment so much lower than the property appraisal or the asking price". This way, they could see that, even though the tax assessment was high, the tax BILLING is really low.
I'm just curious how this works in other parts of the country. (Or, I guess, other parts of the world)
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