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At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is how we get compensated.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is
Property tax is the requirement to pay taxes on a property you own. All properties are subject to property tax, including commercial and residential properties.
The amount of property taxes you owe depends on the value of the property and the needs of the municipality in which the property is located.
Failure to pay your property taxes can result in fines, penalties, interest, and even the seizure of your property.
The act of imposing a tax on someone is called a levy. The Internal Revenue Service (IRS) can impose levies on taxpayers to satisfy outstanding tax debts. Another tax that is levied on property owners is a property tax, which is based on the governmental needs in the municipality where the property is located, as well as the property’s value. In most municipalities, property owners must pay these taxes once or twice per year. Failing to pay the required property taxes can result in severe consequences and hefty fines.
Ad Valorem Tax
A property tax levy is known as an ad valorem tax, which means it’s based on the ownership of something. Only property owners are responsible for paying property taxes. Those who rent or lease their residences will not have to pay property tax unless that payment is mentioned explicitly in the lease agreement. Property owners are held responsible, or levied, for the property taxes, even if they don’t currently occupy the property.
The number of residents who live in the municipality
Any remaining revenue from the previous year’s collection process
The municipality’s revenue from other sources
In some municipalities, property taxes are the only source of revenue to fund community services. In these areas, the property tax rates tend to be much higher. Residents of smaller municipalities might pay more, as well, due to having fewer people to split the bill with each year.
As a property owner, your property tax might not be the same as your neighbor’s or as someone who lives in another county. The county assessor is responsible for performing an appraisal, which determines a property’s value. The appraisal amount is factored into the property tax amount, as well as the needs of the county. Once or twice per year, county officials will determine how much money the county needs to provide services to its residents. Typically, property taxes provide amenities for residents in the municipality, such as:
Traffic equipment, including road signs and streetlights
After officials determine this amount, the county’s residents can typically vote on which services are vital and which can be cut. These votes directly impact how much a county needs to raise from its property tax levies. Finally, the county will assess the aggregate value of all the properties within the jurisdiction, which is based on the appraisals performed by the county appraiser. After determining that value, the county can levy a percentage of the value of each property, which becomes the property tax amount.
Fluctuations in Property Tax
Because property values and the county’s needs play into the amount of property tax you must pay, this number can fluctuate from year to year. If the property values in a certain area spike over a few years, the taxes tend to increase, as well.
It’s also interesting to note that a newly constructed residence will often have very low property taxes in the first year. If the county appraiser doesn’t come out to the property after the home is built, the tax imposed might remain the same as when it was an empty lot. However, eventually the appraiser will adjust the amount of property tax based on the newly built residence, so these property owners should expect that change.
Before purchasing a piece of property, it’s important to use a property tax calculator to understand what you might expect to pay in property taxes. This calculation will help you be prepared, rather than being unpleasantly surprised when the bill comes in the mail. You can also have the property assessed based on its previous value or look at the property taxes levied on comparable properties in the same municipality.
Paying Property Taxes
Some homeowners choose to incorporate their property taxes into their mortgage payments. Your mortgage lender can collect a set amount each month in an escrow account and pay the property taxes when they come due. If you choose to pay the property taxes yourself, watch for a notice to come in the mail about two months before the due date. This will arrive at the property’s physical address, so if you don’t use the property, make sure you are still checking the mail regularly to avoid missing a notice.
It’s important to pay your required property tax on time. The government has the legal authority to seize your property if you do not pay, although typically you will be fined or charged interest before this action happens. However, if your required tax payment goes unpaid for long enough, the government can seize and sell your property to collect on what’s owed. Residents might also have taxes re-levied, which means they will receive bills for back taxes on school taxes or other special programs.
Understanding property taxes can help you plan ahead and avoid financial strain. Every property is subject to taxes, whether it is your primary residence or the location where you do business. Certain properties might be subject to discounts, although that option depends on the municipality and its needs. If you are struggling to pay your required property tax or you owe back taxes, Solvable can help you reduce your financial strain. We offer a variety of resources designed to help those who are in difficult financial situations, including people who owe back taxes on their properties or to the IRS.
Solvable is a for-profit company that helps customers resolve their tax problems, but a free service for consumers. Partners cannot pay us to guarantee favorable editorial reviews or ratings. We do not publish favorable (or unfavorable) editorial reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways, but our reviews are subjective.
How We Make Money
Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
In addition, we may be compensated in the following ways:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, tax preparation, tax audit help and general tax assistance.
Referrals to services that help consumers with tax resolution, tax preparation, tax audit help and other tax issues.
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Free Solvable Services
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We are not attorneys and we don’t provide legal advice. As always, we encourage you to do your homework and check out individuals and companies before you hire them. If you are already working with an attorney, we urge you to ask them your questions. After all, they will be familiar with your situation and the laws in your state.
We hope that you find Solvable helpful in your efforts to get a fresh start.
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Potential savings may vary based on the interest rates, balances and remaining repayment term of the loans you are seeking to refinance. Your overall repayment amount may be higher than the loans you are refinancing even if your monthly payments are lower. Variable rate options will fluctuate over the term of your loan with changes in the LIBOR (or other index utilized by the lender) rate, and will vary based on applicable terms and presence of a cosigner. Fixed interest rates may be based on applicable terms and presence of a co-signer. Additional terms and conditions, and rates are subject to change at any time without notice and may not be available in all states or for all types of current student loans. Such changes should only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Lenders are required to provide every potential borrower with disclosure information before they apply for a private student loan. The Lender you select is required to provide you with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. solvable is not a lender or creditor, it does not offer, extend or alter credit terms. Only participating lenders can perform the full application and deliver the required disclosures, please ask your lender about rates, terms, fees, and potential discounts that may be available for each product.
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Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
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You should contact your tax professional or other financial advisor to determine if you can actually realize savings by refinancing when it can extend the life of your current loan. You should ask the lender about all terms, rates, fees and costs associated with each product and if you will realize a net tangible benefit from the same. All initial estimated savings is done by trying to calculate what your rate may be; however, solvable does not have that information and cannot guarantee potential savings or that lenders will approve you for such product that would warrant those savings. Rates are not guaranteed and change daily. Lenders/Brokers/Dealers/Partners that perform the actual underwriting will have to determine if you meet their underwriting criteria which is unknown to solvable at the time of matching/offer/quote delivery. All amounts are estimates and examples only and do not represent an actual offer.
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