Quick Takeaways

  • Property tax is calculated by the local government and is based on the real estate of each individual, though some jurisdictions tax tangible personal property, like a boat, as well.
  • Property are than used by the municipality to fund sewer, water, and road repairs, maintain parks, fund schools, libraries, and other institutions.
  • Not paying your property taxes can result in a lien against your property.

Source: Property Taxes (Investopedia, Apr. 13, 2022)

Property taxes are a large part of homeownership in the United States. Depending on which state and/or city you live in, your property tax rate will vary. Your property tax is based on an assessment of the value of your home, and the money from these taxes funds municipal entities like schools, libraries, public safety, roads, sewers, water, and more.

The value of your home is dependent on many things, all of which are taken into consideration when determining your property taxes. Whether your town is adding a new school, fire station, or redoing a road or you have added a finished attic to your home, your property taxes will reflect the value added to your residence.

Some homeowners feel that their property taxes are too high, meaning that their house is not actually worth as much as it was assessed for. In this historic housing market, home values have skyrocketed, but we have yet to see the same level of increase from property taxes. If you feel your property taxes are unfair, there are official channels to challenge them.

See References for more information.

Advertisement