TALK TO AN EXPERT NOW

Nassau County: (516) 342-4849
Suffolk County: (631) 302-1940

TALK TO AN EXPERT NOW

Nassau County: (516) 342-4849

TALK TO AN EXPERT NOW
Suffolk County: (631) 302-1940
Property Taxes in the USA

Property Taxes in the USA

If you own property in the United States, odds are very likely that you pay some sort of property tax. This tax is very standard across the jurisdictions that make up the USA. Property taxes can be placed upon real estate as well as other forms of personal property. If you have property with value of just about any sort, it is probably subject to property tax.

Understandably, the realm of property taxes can be a little confusing if you are new to them and understanding how they are calculated. Throughout this page, we will cover everything you need to know. Starting from the basic background information and history of property taxes through modern dilemmas which will need to be handled in the near future.

Table of Contents

Property Taxes in the USA
Important Background Information
What Properties are Subject to Tax?
What Properties are Exempt?
Brief History of Property Taxes
Property Taxes Go Back to Colonial Times
Pre-Civil War Tax Rates Were Uniform
Income and Sales Tax Came Later
Modern Property Taxes Came About Following the Great Depression & WWII
Main Programs Financed by Property Taxes
Water & Sewer
Public Schools
Law Enforcement
Fire Protection Services
Roads & Highways
Libraries & Other Public Services
Important Figures for Calculating Property Tax Rates
Millage Rate
Assessment Ratio
Assessment Value
All About How Value is Assessed
How is Property Value Determined?
Neighboring Property
Recent Sales Data
Amenities on the Property
Data from the County Assessor
Replacement Cost Estimates
Income Earned from the Property
Appeals & Reviews
Limits to Property Increases are Often in Place
Values are Usually Determined on a Consistent Basis
How the Property Assessment Process Works
Remember that Jurisdictions Have Different Rules
1. Assessor Comes and Determines the Value
2. Typical Processes for Determining Value are Used
3. You Receive a Notice
4. You Have the Right to Discuss the Value
5. You Can Appeal & File Tax Grievances if Necessary
Popular Opinions On Property Taxes
Property Taxes are Regressive
Should Help Encourage Growth, Not Inhibit It
Different Methods for Reducing Impact on Urban Growth
1. Urban Growth Boundary
2. High-Density Housing
3. Tax Exemptions
4. Land Value Tax
5. Current-Use Assessment
6. Conservation Easements
Modern Dilemmas with Property Taxes
Exemptions for Multiple Homes
Different Tax Rates Across Counties
Unfair Value Assessments
Modern Policies We have Noticed
Need Help Getting Fair Property Tax Rates in Long Island?

 

Important Background Information

Property tax is enforced at the level of local jurisdictions. The federal government is typically only concerned with capital gains taxes that come from the sale of a property. When we look at property taxes, these are done annually based on your home’s value and the laws of your local jurisdiction.

In order to avoid failure to adequately report the value of their home, jurisdictions typically have their own team for handling value assessments. This way, local programs and benefits such as schools can be funded through the use of property taxes.

Since many people are rightfully suspicious of the county government’s ability to assess the value of private property fairly, there are also steps in place to allow property owners to challenge the assessment values. Typically, the exact amount you need to pay for property tax will depend on your local millage rate, assessment ratio, and overall assessed value.

What Properties are Subject to Property Tax?
One common misconception that people have regarding property taxes is that they are not only applicable to traditional real estate. Those who purchase commercial property also will have to pay property taxes. Other property that isn’t land can also be subject to property tax.

What Properties are Exempt?
Not all properties in the United States are subject to property tax. Just as various organizations are exempt from other taxes, property taxes are no exception. These can include educational, religious, and/or charitable organizations. If you want to avoid property taxes, having property owned by an organization of this sort can help you do so.

Brief History of Property Taxes

The first-ever tax record found by modern archaeologists dates back to 6000 BCE. Archaeologists found soil tablets in the ancient city-state of Lagash that described property taxes. Since then, successful empires including ancient Egypt, Greece, Rome, and so on, took place. It seems that there is a correlation between property taxes and successful civilizations.

Property Taxes Go Back to Colonial Times
In the United States, we also have had property taxes since around the beginning of our nation. However, these did not take place until after we switched our federal government focus away from the Articles of Confederation towards the modern US Constitution. By 1796, we had property taxes in place across almost all of the colonies. Delaware, however, was a noteworthy exception. Instead of taxing property, they would tax income gained from it.

Pre-Civil War Tax Rates Were Uniform
Before the Civil War, there was a unifying statement made that echoed the federal property tax policy: “the taxation of all property, movable and immovable, visible and invisible, or real and personal, as we say in America, at one uniform rate.” This would be something that stayed in effect until the post-Civil War period where the economy switched gears and required further clarification.

Income and Sales Tax Came Later
As America entered the modern area, one thing which started to become apparent was the value of stocks and other impalpable property. To stay up with trends and keep tax revenue coming in despite new forms of property like these, things like income and sales tax came into mainstream adoption. Today, we still have many of these original measures in place in various jurisdictions.

Modern Property Taxes Came About Following the Great Depression & WWII
With the Great Depression and the economic downturns that came about as a result of war, many local jurisdictions found it fitting to lessen the burden of property taxes. Many places even exempted citizens from having to pay them. Especially towards veterans who went overseas to fight for our freedom. Once the USA and the Allied Forces rose victorious in WWII, modern property tax policy which we still see today came into full effect.

Main Programs Financed by Property Taxes

One of the common questions people have when they learn about property tax is what the government does with all this money. If you add up all the property that exists in a particular area and consider the local property tax rate, you will come up with some pretty astronomical numbers.

To be clear, the money garnered from property taxes doesn’t just go down the drain of government bureaucracy without producing things of inherent value. Specifically, programs that were voted into existence by the citizens themselves and signed off at the local level with full knowledge of the taxes that would take place. Below, we will break down the main programs financed by property taxes.

Water & Sewer
If you have running water and a sewage system in place in your local jurisdiction, you can thank property taxes for financing this. Many people would be otherwise left speechless as to how they can secure running water and sustainably handle waste without these programs. They also help construct uniform infrastructure that stretches across the continental USA despite being financed by different localities.

Public Schools
Not too long ago, we decided that every child should have a right to education. To do this, we needed to secure funding in order to construct schools, pay for the teachers, administrators, maintenance, and so on. If you went to a public school and/or have children currently enrolled in public school, your annual property taxes will be the ones to thank.

Law Enforcement
We all know how important it is to have order in our society and be able to walk the streets of the United States in peace. This wouldn’t be possible if we didn’t have public servants ready to put their lives on the line for our safety. Local law enforcement receives their paychecks and funding from our property taxes. Therefore, they are truly working directly for you and your family.

Fire Protection Services
It only took us a handful of fire disasters to realize how important things like building codes and fire departments are. Not to mention, access to fire hydrants at all major parts of a city. If you ever call the fire department and have them assist you, know that you have already paid for their service. Your annual property taxes are the main reason that they even exist in the first place.

Roads & Highways
Want to take a road trip across the USA? If so, you will likely use the public highways. We have come a long way since the use of the Oregon Trail. Today, vehicles can travel at fast speeds all across the United States thanks to highways. Best of all, what keeps them maintained and in good shape are your annual property taxes. It is also fair, then, for you to expect your local government to keep your roads and highways freshly paved and in good shape.

Libraries & Other Public Services
Libraries are a staple of any civilized society for their great ability at educated the population. If it weren’t for libraries, it would have been very difficult for humans to make it as far as we have. They are a store of knowledge that is priceless. These and other public services are paid for by your annual property taxes.

calculating property taxes

Important Figures for Calculating Property Tax Rates

When in the process of estimating your property taxes, it’s important to know the process for how they are calculated in the first place. For your reference, we will cover all the important figures that you need to keep in mind while you are planning out your yearly property taxes. If you have a new home, you will need to find the exact rates for each of the following figures in your local jurisdiction.

Millage Rate
One of the most important figures to keep in mind when you are determining your property taxes is the local millage rate. The millage rate is the number of dollars per each $1000 in your property’s value that is eligible for taxation. For example, if you have a millage rate of 10, then you will need to pay 1% of your property’s assessed value in tax season.

Assessment Ratio
Your local assessment ratio is another figure that you will need to be aware of if you hope to have your property tax estimation on track. This is the ratio of the home value that the official appraisal assessor will use to eventually leave you with a property tax bill. If you have a lower assessment ratio, this is seen as better since you will only have to a portion of your home’s market value in property taxes.

Assessment Value
Typically, each year a county assessor will come and determine the value of your home. If your home has a higher value than the previous year, you should also expect to pay a slightly higher property tax. This is because the most important figure when calculating your property tax is the main figure that you need to calculate property taxes. If you want to estimate your incoming taxes for this year, be sure to pick up your property card from your local assessor’s office.

All About How Value is Assessed

You would think that the easiest way to determine your home’s value is to simply list the amount that you initially paid for it. However, this data is only viable in the short-term. For your reference, let’s go ahead and look at how your home’s value will typically be assessed.

How is Property Value Determined?
There are many different ways that a property’s value can be determined. In the United States, there is a pretty specific routine that needs to be followed. As we will explore below, various things are considered when determining property value. Since this matter is directly concerning to county authorities who depend on property taxes, there are various checks to ensure the quality of assessments.

Neighboring Property
One of the easiest ways to determine the value of a property is to look at neighboring properties of similar size and amenities. If you have a 3-BR home with a 100 square-foot background, for example, a home in your area with these specifications will probably end up having a similar value to your home. However, those with extra amenities such as a pool, extra bedroom, and so on, will notice that their property is slightly more valuable.

Recent Sales Data
When you purchase a home, this is a direct record of how valuable it is. Therefore, this data might also be used by your county for your home’s value assessment. However, this typically won’t be viable years down the line. What we find is that home values tend to go up as time progresses. For this reason, a county assessor will only place your value according to recent sales data that isn’t several years old.

Amenities on the Property
As we briefly mentioned, having above-average amenities on your home such as a swimming pool will result in higher value assessments. Therefore, those who want to minimize their property tax rates should avoid investing too much into their property. Instead, remodeling and investments should be done sparingly to avoid sudden spikes in your property’s value.

Data from the County Assessor
If you are looking through information like how adding new amenities to your home can increase value and wondering why this is your answer. Typically, you will have a county assessor come over and view your property to assess the value. Therefore, if you do improvements after the assessor leaves, you can expect them to come back, notice these things, and then increase your value assessment. In turn, your property taxes also go up.

Replacement Cost Estimates
One of the ways that property values can be assessed is by determining how much it is estimated to cost for the building. Therefore, in the event that the property would be destroyed, there is a specific number on file that is roughly what it would cost to rebuild your property. If the original cost of a property is used, it is typically required to be adjusted consistently to account for inflation.

Income Earned from the Property
If a particular property generates some sort of income, this will automatically start to increase the property’s overall value. The current and future expected income streams can be used as factors in helping this calculation. However, this is not a typical approach when we look at real estate property where the owner simply lives on the property and doesn’t generate income from it.

Appeals & Reviews
Sometimes, the value that is placed on a property is not in alignment with what the owner has in their records and calculations. This is often due to an inherent conflict of interest where a county official comes and assesses your home’s value trying to increase tax revenue for the jurisdiction. For this reason, property owners have the right to appeal their value and present data to back up their case.

Limits to Property Increases are Often in Place
As we mentioned, property values tend to increase over time due to natural factors such as improvements and inflation. However, spikes in value can be very detrimental to property owners expecting to only pay a particular figure each year for property taxes. For this reason, there are sometimes limits put in place by local jurisdiction as to how much a property value can increase.

Values are Usually Determined Consistently
Property values will never stay stagnant. Jurisdictions will have their own rules in place for how consistently the value needs to be reassessed. Sometimes, this is done every year, three years, or even 5 years. This all depends on the rule put in place by your local county.

How the Property Assessment Process Works

When people learn that they have their property on file with the county, that there is an official property card with their home’s value, and so on available, they might immediately start to wonder how this process works in the first place. In order to help you understand what to expect as a new homeowner or one that wants to minimize their property taxes, let’s go ahead and discuss all that you need to know about the property assessment process.

Remember that Jurisdictions Have Different Rules
Right off the bat, it’s important to remember that different jurisdictions will typically have different rules. Therefore, we will do our best to describe this process in a universal manner. Since we are based in Long Island, though, much of the information presented here might be geared more towards residents of either Suffolk or Nassau County.

  1. Assessor Comes and Determines the Value
    Every year or so, your property will be up for re-assessment. When this happens, you will typically receive a notice that the assessor would like to come by and enter your home. Although there is no law stating that you must let them enter, it is typically suggested to let them do so since this will be one of the ways that you can ensure a fair and realistic assessment. If you force the assessor to cut corners and make some guesses, it can result in a much higher property value than you expect.
  2. Typical Processes for Determining Value are Used
    When we broke down the processes for determining the value above, we did this so that you can have an idea of what to expect when the assessor comes. Keep in mind each of these processes so that you can anticipate and plan for the assessor’s visit. If you want to finish your basement or buy new appliances, for example, try to do so after the assessor leaves to avoid pre-mature impacts on your property taxes.
  3. You Receive a Notice
    Once your property value has been determined, you will usually receive a notice of this occurring. When this happens, it’s important not to discard this notice as it will have an immediate impact on your property taxes. In most cases, you will simply need to look at the value and confirm that it matches what you were expecting. If it doesn’t, then you will likely need to spend time doing the steps described below.
  4.  You Have the Right to Discuss the Value
    In just about any jurisdiction across the United States, owners are given the right to discuss their home’s valuation with the tax assessor. Therefore, you must do checks on your home’s assessment. Consider getting a private appraisal done, comparing market value, and using all of the same strategies we have mentioned on this page for determining your home’s value. This way, you can be proactive and hopefully avoid needing to take further action.
  5. You Can Appeal & File Tax Grievances if Necessary
    If your home’s value is simply too high and you have no idea where to turn, hiring a team such as Heller & Consultants Tax Grievance is a good option to formally get your property taxes lowered through an appeal. Once you get your property assessment appealed, you can then get the proper tax grievances that you deserve. This way, you will only pay what you owe in property taxes rightfully. Not the exaggerated amount that the assessor would have otherwise forced you into.

property tax opinions and trends

Popular Opinions on Property Taxes

In the modern area of property taxes, we have noticed quite a bit of new opinions and trends. As we have developed systems that continue to improve, there is an influx of opinions both old and new on this system. In order to develop a full view of how property taxes in the USA work, it’s important to also take a step back and know these popular opinions.

Property Taxes are Regressive
If you are somebody who has less income and overall capital than, say, a billionaire, then you should expect to pay a lot less in proportion to what they do. As such, some people see that this is the case when it comes to property taxes.

However, those with old homestead land that dates back generations in their family also have reported paying higher property taxes due to higher property values. This is also burdened by the fact that they don’t make a lot of income from the land.

For this reason, many people see property taxes as being overly regressive. If you are a poor landowner who owns valuable property, you can theoretically be forced to eventually sell your land to avoid high amounts of property tax.

Should Help Encourage Growth, Not Inhibit It
When property taxes were first developed, the idea of having property taxes in a manner that still promotes healthy urban sprawl was important to lawmakers. In their eyes, they wanted both wealthy and lower-class property owners to have a fair tax rate.

The problem with good intentions, though, is that it doesn’t always align with what ends up occurring. This is why we have noticed plenty of different strategies for reducing the impact that property taxes have on urban sprawl.

Different Methods for Reducing Impact on Urban Growth

Lawmakers have long wanted property taxes to be done in a manner that still will help promote urban growth. After all, if property owners are forced to pay high loads of property taxes, they might end up like some of the poorer farm owners mentioned above and be confronted with an ultimatum to either sell the property or go into debt to pay their taxes.

However, the reality is that lawmakers want to reduce negative impacts on urban growth. This way, the United States can keep anticipating lots of growth from private landowners. Otherwise, the system will have taxes that are too high to promote growth. Below, we will cover some of the techniques that have been used to reduce the negative impacts of property taxes on urban sprawl.

  1. Urban Growth Boundary
    One of the ways that growth can be focused on urban centers is when urban growth boundaries are put into place. Essentially what this does is put boundaries in place forcing investors to look towards land that is already under heavy development. Usually, an urban growth boundary will come along with a deadline. In this case, the deadline will have to be reached before development can occur.
  2. High-Density Housing
    If investors were left to do as they will, they would sometimes suck up all the good land in urban cores, leaving the lower class out of the equation. If this were to happen without intervention, urban cores would be heavily gentrified to the point where the lower class is forced to leave altogether. For this reason, high-density housing is often forced onto smaller lots.
  3. Tax Exemptions
    Property such as farms, ranches, and areas that would otherwise be very expensive to own for property taxes are often given special exemptions. If this didn’t occur, many important actors in the USA economy would be unable to afford living where they do. Depending on your locality, you will usually have access to some sort of exemption for these sorts of property.
  4. Land Value Tax
    A land value tax is a method for separating a property’s value into different components such as the value of the amenities and improvement along with the land itself. Depending on the jurisdiction, there will be lower tax rates given on one of these components. Typically, the land value is the one with the higher tax rate. This makes this sort of tax great for those who want to heavily improve the lot.
  5. Current-Use Assessment
    When the current-use assessment is put into play, how the property is currently being used is the most important factor looked at for assessing a property’s value. Therefore, those who have property in urban centers that are generating lots of income will have to pay higher property tax rates than those who are humble homeowners with no income from the property itself.
  6. Conservation Easements
    When property owners live in an area where development and investment are put in place as a means to increase the property value, they can put conservation easements in place to restrict any sort of development on the land. This usually ends up keeping the value of the property at a reasonable level, lowering tax rates, and helping the owner keep development and investment away from being calculated as a factor in their property’s value.

Modern Dilemmas with Property Taxes

Just like many other government systems, there can be problems that run into the system of property taxes. Although the intentions and goals are usually pure, the reality of the system will sometimes play out a little differently than expected. Below, we will break down some of the modern problems we find with the current system of property taxes.

Exemptions for Multiple Homes
As we mentioned briefly throughout this page, various exemptions can be taken advantage of as property owners. This way, you can pay the lowest amount of property taxes possible. However, one modern dilemma that we have noticed is people filing exemptions for multiple homes when they are not rightfully able to do so. Typically, exemptions that are typically allowed will only apply to the first home.

Different Tax Rates Across Counties
If you live in Long Island, you are paying a much higher tax rate than those who live in a small town in Alabama. This is because tax rates are determined by local counties and not the federal government. Although many people might see this as a good thing, they probably also live in one of the areas with lower property taxes. Those who happen to live in a place like Long Island, though, are expected to pay disproportionately higher tax rates.

Unfair Value Assessments
As we have briefly mentioned, there is an inherent conflict of interest when you have somebody who works with your local jurisdiction being the one with the final say on what your property value is. For this reason, we have noticed that many people do end up with higher property taxes than what would be acceptable and normal. This is also forcing people to secure justice using the system of tax grievances.

Modern Policies We Have Noticed

As we have explored, there are certain problems that people face with land becoming more and more expensive. For example, people who secured property for lower rates and keep the land in their family for generations can often run into tax spikes.

Gentrification, for example, has caused many properties that were once very affordable to own and pay property taxes for to force owners into new areas. For this reason, some states provide homestead exemptions that limit the percentage increase in tax. This way, old owners still get to enjoy the land of their families without expecting huge tax increases.

One of the ideas presented for securing more property tax revenue for the federal government is to bring back an old pre-Civil War system where states sent a percentage of their property tax revenue to the federal government. An action such as this would require lots of states to make deals and laws to be passed.

However, capital gains taxes are something that generally falls into view when a property owner sells their land. These are separated into short and long-term gains. If you own property for more than one year, you can secure access to the lower rates of long-term capital gains tax. Notably, cryptocurrency has recently been included in the types of property that are subject to capital gains tax.

Need Help Getting Fair Property Tax Rates in Long Island?

If you are in Suffolk or Nassau County in Long Island, you know very well how expensive it can be to pay property taxes in this part of the country. Sadly, many people are being forced into paying exorbitant tax bills. If you need assistance in appealing your property’s value and getting a better rate on your property taxes, give us a call in Nassau County: (516) 342-4849 or in Suffolk County: (631) 302-1940. We will not charge you a single penny until we secure you a lower tax rate.

How to Lower Your Long Island Property Tax Bill in COVID Times

How to Lower Your Long Island Property Tax Bill in COVID Times

It has been a difficult year for everyone, including Long Island residents. Unfortunately, it has also been a difficult year financially for county and local municipalities, which are looking to close their budget gaps with yet another property tax increase for Long Islanders.

According to a Newsday article, some Suffolk and Nassau County residents saw a tax increase of up to 65% this year, while others managed up to a 35% reduction in their tax bills. Wouldn’t you rather be in the latter category? Read on to find out how you can join the thousands of residents who are grieving – and ultimately lowering their property tax bills on Long Island.

Step One: Assess Your Assessment

Your Long Island property’s tax value is determined by a variety of factors. One is the school district you are in. There is not much you can do to change this part. Another factor that you can change, however, is the assessed market value of your property.

Your property’s assessed value is the estimated price at which your property would sell for under normal circumstances – aka its Market Value. The Market Value of your home is usually determined by comparing your home to similar homes in your neighborhood. By averaging the prices at which similar homes have recently sold, an assessor comes up with the market value of your home.

Then, your local municipality uses your assessed property value to calculate your tax bill, by multiplying it by the local tax rate. This means your tax bill can change each year as local government budgets, tax rates, and your property assessment change.

You may never see the tax assessor.  To reassess your home, the assessor will most likely make a street visit, and you most likely won’t even know that they’re there. However, if a home inspection is requested, while you are not required to let the assessor in your home, your cooperation helps assure that your assessment will be fair and based on accurate information. Otherwise, the assessor will have to estimate how many bedrooms, bathrooms, etc., there are in your home. Later, if you file a tax grievance, assessment officials will need the exact information the home inspection would have provided in order to rule on your request for a lower assessment.

For safety reasons, you should never allow anyone into your home without proper identification issued by the authorized town or city. If the timing of the visit is inconvenient you can request the assessor return at a later date.

While you cannot alter the tax rate, you can challenge the validity of your property’s assessment, ultimately lowering your tax bill. Here’s how.

Step Two: File a Grievance 

If you want to lower your tax bill, you’ll need to file a Property Tax Grievance with your local tax office. What you’re essentially doing is challenging your property assessment as incorrect or too high.

Filing a Property Tax Grievance means that your property’s assessed value will be reviewed by an Assessor to see if a reduction is warranted. Don’t worry though – it’s actually illegal for the tax office to raise your property’s assessed value in a reassessment, so your taxes can never go up because you filed a property tax grievance.

The Details 

Suffolk County Residents – Filing a Property Tax Grievance takes about a year, end-to-end, however, the results of your grievance will be retroactive from the date you filed it. So if you file for 2021, and get the decision in 2022, you’ll retroactively be refunded on the difference in your tax bill from 2021. You cannot, however, grieve tax bills from years past, unfortunately. Once a tax year’s deadline passes, you’ll have to wait until the following year to file your property tax grievance.

Nassau County Residents – Filing a Property Tax Grievance takes about a year, end-to-end, and you always file for the following year’s tax bill. So, if you file in 2021, and get the decision in 2022, you’ll see the difference in your 2022-23 tax bill. There are typically no refunds necessary since your tax statement is adjusted in advance.  You cannot, however, grieve tax bills from years past, unfortunately. Once a tax year’s deadline passes, you’ll have to wait until the following year to file your property tax grievance.

Important Tax Deadline Dates to Remember

Nassau County’s filing deadline – Normally March 1st– Extended to April 30th, 2021

This year’s Suffolk County filing deadline – May 18, 2021

Getting Tax Grievance Help

While you are allowed to file a tax grievance yourself, most homeowners that try to don’t get the reduction they deserve. They’re either underprepared or don’t have the time, experience, or documentation available to best negotiate.

For example, if your tax bill’s reduction doesn’t seem adequate, you can appeal your reassessment via an impartial hearing. If you get to that point, you’ll definitely want to have an experienced tax lawyer on your side to properly plead your case and get you into the group of Long Island homeowners who have successfully lowered their property tax bills by up to 35% during the COVID Crisis.

If you’re ready to lower your Long Island property tax bill, give a call to Heller & Consultants Tax Grievance in Nassau County: (516) 342-4849 or in Suffolk County: (631) 302-1940 to start your Property Tax Grievance before this year’s deadline passes you by.

 

Definitive Guide to Property Taxes in 2021

Definitive Guide to Property Taxes in 2021

Once you finally purchase your first home, you will probably be excited to plan out all the new space that you now own. While you are in the process of planning out how you will use your new property, one thing you will need to remember are the impending property taxes that you will now have to pay annually.

To be clear, property taxes are something that will be tacked on separately from your mortgage payments. One of the common misconceptions people may have is that these things can be paid for simultaneously. On this page, we will cover all that you need to know about property taxes so that you will be prepared for your first tax season as a homeowner.

What Are Property Taxes?

Property taxes are not the invention of modern governments. In fact, they date back to ancient times. It didn’t take long for governments in the past to realize that if they had property taxes that they would be able to finance great feats such as building wonders and having social programs. Today, property taxes are a staple of the funding used by local jurisdictions in the United States.

Local Jurisdictions Depend on Them

Federal funding doesn’t tend to reach over to local county governments that well. Although some federally-funded projects do reach down to local governments, they aren’t enough for local authorities to handle all the projects they need to fund, such as public schooling. In fact, those who live in areas with higher property tax rates tend to enjoy higher-quality schools in their area.

They Are Paid Annually Using Your Home’s Value

Each tax season, you are required to file property taxes with your local state government as part of your annual taxes. Local counties have your property already on record with the latest assessed value. As we explore the process of property tax calculation below, we will discuss exactly how this tax balance is calculated. This way, you can start estimating how much you will owe this year for your property taxes.

They Are Not Federally-Mandated

One of the most important pieces of information that you need to understand regarding property taxes is that there is no set amount delegated by the federal government. Instead, local counties are the ones who decide how much you owe each year for property taxes. Therefore, anybody who wants to pay the lowest possible property taxes should start by considering where they live. Since there is no getting out of property taxes, it’s important to keep the tax rate in mind before purchasing a home.

How Much Do You Pay in Property Taxes in Long Island?

long island property taxes

In Long Island, the two main counties to consider are Nassau and Suffolk County. In Nassau County, you can expect to pay an average of 2.24% of your home’s assessed fair market value. Suffolk County is a fraction more expensive, clocking in at an average of 2.3% of the assessed fair market value. Typically, this means that people will pay an average of about $11,232 per year just on their property taxes. In order to only pay the fair amount, it’s important to know how to calculate how much you owe.

How Do You Calculate Property Taxes?

There are some things that you will need to understand if you want to know how to calculate your annual property tax rate. Regardless of where you live, there are some formalities that you will need to be aware of. Below, we will cover all that you need to know about how to calculate your property taxes. Keep this in mind if you are new to being a homeowner.

Assessed Value & Fair Market Value

The fair market value of a home is often different than the assessed value that is formally prepared by a county assessor. However, the assessed value is what will be used in the formula we share below for calculating your annual property taxes. If you are unsure what this figure will be, start by using the amount you paid for the home. If you have lived in a home for a while, though, keep in mind that your assessed value has probably gone up.

Assessment Ratio

Each county jurisdiction will have an assessment ratio that is determined by local authorities. Depending on where you live, this can be 10 to 100 percent of your home’s value. When calculating your property taxes, the assessment ratio will be multiplied by the home’s value to help determine your property tax rate. Therefore, be sure to know what this number is.

Millage Rates

If you translate the word “mil” into Spanish it means the number 1000. This is an easy way to help you remember what millage rates are. Just like assessment ratios, they are multiplied by your home’s value to determine how much you will need to pay in property taxes. The millage rate is used to describe how many dollars per thousand dollars you owe in taxes. 10 mils, for example, means that you are liable for $10 in every $1000 of assessed value.

A County Assessor Usually Does These Things

One of the main questions people run into once they understand how property taxes work is how their home’s assessed value is determined. To determine your home’s value, a county assessor will come by every year, 5 years, or whatever your local jurisdiction goes by. They will be the ones to determine your assessed value.

The Formula for Calculating Property Taxes:

Since the above description may not have been clear enough for those who would rather see the precise equation, we have also included the typical calculation that you can use for estimating your property taxes below. Make sure to consult with your local authorities for your assessment ratio, millage rate, and assessed value.

Assessed Value x Assessment Ratio x Millage Rate = Total Property Tax

5 Ideas for Securing the Lowest Possible Property Taxes

If you are new to property taxes, you might be on the lookout for how you secure the lowest possible taxes. Below, we have listed 5 ideas for you to keep in mind while trying to secure the lowest possible annual property taxes.

1. Buy a House in an Area with Lower Property Taxes

As we briefly discussed above, one of the most important things to consider is the location of your home. Specifically, what county that it resides in. This county will be the one that has the final say on what your assessed value, millage rate, and assessment ratio are. In other words, they directly control what you will pay each year for property taxes!

2. Don’t Get the Most Expensive Home

The more expensive your home is, the more you should anticipate paying each year for property taxes. Therefore, if you are still on the lookout for your new home and want to avoid paying exorbitant property taxes, try to get a modestly-priced home. Otherwise, your property value will be higher at the end of the day. Although it is tempting to get that million-dollar mansion you were dreaming of, this will also result in higher property taxes than a modestly-sized $500,000 home.

3. Calculate Your Estimated Taxes While Accounting for Growth

One of the common occurrences we see with homes is that they tend to increase in value over time. Therefore, keep in mind what kind of salary you have now, what you anticipate in the future, and remember that you will likely have increasingly-expensive property taxes to pay each year. The best rule of thumb is to estimate to pay more than what you actually anticipate paying. This way, you can end up budgeting well and still save some extra cash in your savings at the end of the day.

4. Don’t Invest Too Much in Remodeling

One of the ways that you can ensure that you will only have to pay a particular figure for your property taxes is to avoid too much remodeling and investment into your home. As you invest in your home, your value will also start to climb up. As a result, you will also have to start paying more in property taxes. Therefore, those who want to avoid high property taxes should be sparing with upgrades.

5. File Tax Grievances

If you think that your home’s assessed value is too high, you will feel that you are paying an unfair amount of taxes. In these instances, the only viable option to consider is filing tax grievances and formally challenging your home’s assessed value.

Need Help With Tax Grievances?

If you live in Suffolk or Nassau County, then Heller & Consultants Tax Grievance is a great company to consider hiring to start paying your fair share of taxes, and not a dime more! Heller & Consultants won’t charge you a penny until your assessed value is formally changed. Give us a call today in Nassau County: (516) 342-4849 or in Suffolk County: (631) 302-1940 if you feel your assessed value is too high.

How Does Property Assessment Relate to Your Property Tax Bill?

How Does Property Assessment Relate to Your Property Tax Bill?

Taxes are an inescapable fact of life. If you’re a property owner in New York, property taxes form a big part of your tax liability. Property tax is paid on property owned by individuals or other legal entity and varies from one state to the other. This tax liability depends on the market value of your property.

The basis of property tax is the property value, which the authorities get from the property tax assessment. It’s important to understand the details of the property tax assessment process because it directly affects your tax bill. New York has the highest tax rates as residents spend almost 13.8% of their annual income on state and local taxes.

It’s important to remember that failure to pay property taxes, penalties, and accrued interest could lead to loss of your property. For these reasons, it’s important to learn more about all factors affecting your tax deductions and the tax grievance process.

This post examines property tax assessments, their effect on your property tax liability, and how to handle the process.

How is Your Property Tax Calculated?

Property tax is primarily based on the property’s value. The property value varies from year to year and is determined on a specific date of the year. The intervals of value assessment vary in different jurisdictions. While in some areas the assessment is done annually, in others the process is done during property transfers.

In New York, property tax is determined using the assessed value. To calculate the annual property tax in New York, you multiply the taxable value of your property by the tax rate (mill rate) for the property’s tax class. The rate changes every year. For example, in NYC, the average effective property tax rate is 0.88% but rises to 1.69% statewide.

The authorities can carry out a property assessment in three ways:

  1. The replacement method/ cost method
  2. The sales comparison method/ the market approach method
  3. The income method for business properties

Exemptions are subtracted from the assessed value to give the taxable value. The tax authorities apply the tax rate to the taxable value to show what you owe in taxes. New York State residents’ exemptions include the State School Tax Relief Program, or STAR, and the homestead property exemption to lower the amount of their home’s value they are taxed on.

When determining property tax, New York state authorities consider public goods and services. Public goods include facilities like public schools, and parks, sewer lines, and roads. Public services include police services, fire services, garbage pickup and recycling.

Each of these public expenditures form a component of the applicable tax rate. Due to such calculations, there are cases where the assessed value of a property can differ from the actual value of the property in the market.

If you feel the property assessment is not right or seems too high, you have a right to appeal the assessment. To do this successfully, you need the professional services of a tax expert.

What Makes Your Property Tax High or Low?

The biggest factor in determining property tax is the assessed value of your property. The other crucial factor in your property tax bills is the use of the property. For instance, are you using the property for residential, commercial, rental, agricultural, or is it vacant land? Some properties such as churches and charity offices might be exempt from taxes.

The tax multiplier is applied uniformly for property in the same category but differs from one category to the other. While the tax multiplier is uniform in the same category, there are other factors that affect the final tax figure. These include location, size, age, and architecture. Your property tax bill changes from year to year depending on fluctuations in perceived market value.

Using a Tax Expert in Property Assessment

A favorable assessment is crucial if you want to lower your property tax bill. The smartest move is to use a tax expert to file any grievance against property tax issues. A property tax expert understands property taxation laws, regulations, and deductions, assessment laws at both state and federal levels.

Tax professionals help in the following ways to ensure a favorable property tax assessment:

  1. Tax rates/market values: Your tax advisor ensures that you understand the tax rate and the market value that the assessor is using to calculate your tax assessment. If one of these factors is wrong, you are free to appeal.
  2. Analyze the assessment for errors: A tax expert ensures the information on your property card is correct. They check government records relating to your property- location, size, dimensions, use, etc. These professionals ensure your information is up to date and point out any discrepancies that impact your assessment negatively.
  3. Review comparable properties: If you file a tax grievance, your tax advisor helps review data pertaining to the comparable properties used in the assessment.
  4. Consultancy: A property tax expert offers advice in reducing your tax burden. For instance, they advise you to avoid building before an assessment. Home improvement projects like a pool or a garden shed improve the value of your home, and hence a higher tax assessment may be levied. Avoid building permanent structures before an assessment. They also advise regarding your home’s curb appeal, which is highly subjective.
  5. Advice on your role: The tax expert might advise you to act as a “tour guide” for the assessor to ensure they see the whole picture to avoid bias.

If you have an issue with the assessed value of your property in New York, you can file a tax grievance. The best approach is to use a tax grievance company, which will have the expertise and resources to help you achieve positive results.

Heller & Consultants is a tax grievance firm with decades of experience across Nassau or Suffolk counties, New York. We have worked with thousands of aggrieved property owners over the years to get favorable property tax assessments.

Contact our team today for dedicated advice on your property assessment in Nassau and Suffolk counties, New York.

 

 

Nassau County to Begin Annual Property Assessments

Nassau County to Begin Annual Property Assessments

In January 2020, Nassau County began sending out new property assessments that had previously not been scheduled to arrive. This is because it was recently decided that annual property assessments will now be taking place in Nassau County. This can be either really great or heartbreaking news, depending on how this impacts your taxes. Below, we will cover all that you need to know to be ready for this change.

What Does This Mean?

Property assessments are what the government uses to help calculate your property tax rate. With new sets of assessments comes an increase or decrease in your taxes. Don’t take this change lightly. As one Nassau County resident said, “my taxes are going to go up 60%” However, there are also those who will be paying lesser amounts of taxes this year due to a declining property assessment for their home.

Who Will This Impact?

Anybody who pays property taxes in Nassau County should expect a change in their tax bill this year. Since the county has decided to re-assess the value for all homes in the area, everybody should expect tax changes. This will likely also trickle down to renters whose landlords are all of a sudden slammed with new tax increases. Those who have previously won tax grievance cases may now have to jump through another hurdle to ensure that they can keep the same fair assessment rate.

Why Is This Being Done?

Nassau County pledges to keep property values as current as possible on their records. When you add in 1.5 million residents, things can get tricky really fast. Especially when there are long delay times between property assessments. The idea here is that with annual property assessments home values can stay as up-to-date as possible.

Can You Still Grieve This Year’s Assessment?

Grievances for the current tax year officially ended on April 1. Therefore, unless you already formally filed your appeal, you will need to start planning for doing this for the next tax year. As we have seen throughout history in the county, those who file for tax grievances will often save lots of money on property taxes. The impacts this trend will have on the future are still yet to be seen.

Need Help with Property Tax Grievances?

If you believe that your new official property assessment is inaccurate, you have the right to file for grievances. It is fair for you to expect to pay your fair rate of taxes, and not a cent more. Here at Heller & Consultants Tax Grievance, we will work with you to formally appeal your property assessment. Best of all, we won’t charge you a dime until we help you win your case and lower your property taxes! Contact us today to see if we can help you.

How High Are School Property Taxes in Long Island?

How High Are School Property Taxes in Long Island?

Before you move into a new location, checking up and doing some research on the taxes you will pay is a very responsible thing to do. Here is New York, Long Island is one of the popular places for people to buy property and move to. However, school property taxes are something that you should be ready for. Below, we will cover what you need to know about the school property tax rates in Long Island.

There are Two Long Island Counties

For starters, you need to be aware that Long Island is broken into two separate counties. These counties have different property appraisal processes and authorities. The tax bill also includes prices you need to chip in for your local school district.

Suffolk County

School taxes are in the same annual tax bill. This way, you won’t have to expect separate taxes for property and school taxes. The median property tax bill in Suffolk County tends to be right around $9,500. Keep this information in mind while determining which county of Long Island will serve your needs the best. Note that this also includes the price needed for school property taxes.

Nassau County

In Nassau County, the median property tax bill is $14,872 according to state sources. In other words, the price of living in Nassau County will be much higher, on average, when taxes come in question. Especially if you live in an expensive district.

Rises are Capped by the State

Regardless of where you end up choosing to buy property, you should know that the school tax rate is capped in the state of New York. This rate is capped at a steady 1.8% rate for the 2020-2021 fiscal year. Therefore, prepare for rises in at least this percentage each year indefinitely at your new property location.

Your School Property Taxes Depend on Your County & District

To make a complete tax estimate, you will need to know which county and school district that you fall into. As we broke down above, living in Nassau County often means that you will pay larger amounts of taxes than those who live in Suffolk County Property Taxes.

Living in a Successful School District Can Be Costly

Syosset Central is a very successful schooling district located in Nassau County. Therefore, if you live in a district like this which constantly receives A+ ratings across the board, plan on paying the extra cost when it comes time to handle school property taxes!

Doing a Property Tax Grievance Can Save You Quite a Bit on Taxes

One of the best ways that you can minimize your burden of paying taxes is by doing annual property tax grievances. How this works is simple. Properties often receive appraisal values that are higher than their actual cost. When this happens, you will end up paying higher amounts of taxes. Therefore, consider hiring a company like Heller & Consultants Tax Grievance that don’t charge anything until they successfully lower your taxes.

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