What Affects A Homes Property Tax Assessment?

What Affects A Homes Property Tax Assessment?

Paying taxes on real estate is a tough unavoidable decision unless you are looking for trouble from the federal government and your state is going to come for their taxes and make things more difficult to deal. Homeowners who are paying higher taxes than they should be or that they believe they should be.  The reality is that there are thousands of homeowners across the country that are paying higher taxes than they truly should be.

Tax assessments are always a debatable topic certainly because homeowners who have tax assessments that are lower than what they should be don’t complain.  Those homeowners who have high tax assessments are frequently asking how to appeal a tax assessment on a home. Below are some of the common factors discussed about what a tax assessment is, how tax assessments affect homeowners.

What Is A Tax Assessment?

Property taxes are a huge source of revenue for local and state governments.  A homes property taxes are based on the homes assessed value.  The higher the assessed value, the higher the taxes will be. A tax assessment is usually made up by two components.  The first component of a tax assessment is the value of the land in which a home sits on.  The second component of a tax assessment is the value of the actual structure or home.  The value of the home is typically much more than the value of the land unless there is a significant amount of land.

It’s extremely important to understand when discussing a tax assessment or assessed value that you understand there is a major difference between assessed value and market value.  A homes tax assessment can be an accurate measure of what the home is worth if it were to be sold, but more commonly than not, a home’s tax assessment has no correlation to market value.  Some homes are worth much less than the assessed value and others are worth much more. When reviewing a tax assessment it is critical to understand if your local municipalities assessments are based on 100% market value or less.  

What Affects A Homes Property Tax Assessment?

Depending on your local municipality, tax assessments maybe reviewed and updated annually, bi-annually, or every four or five years.  It really depends on your local municipalities rules and regulations for tax assessments. There are many factors that can affect a home’s tax assessment.  One of the biggest factors are improvements that are made to a home.  If an addition is built on a home and it adds additional square footage, it’s likely the assessed value of said home will increase due to the additional living space. 

Some other things that can affect a home’s tax assessment include;

  • Adding a deck or patio to the home.
  • Improving a kitchen or bathroom.
  • Building a shed or outbuilding

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