Understanding Property Taxes: What Homeowners Should Know

November 27th, 2023

Property taxes are an important aspect of homeownership. Here are some key points that homeowners should know about property taxes:

1. Definition of Property Taxes: Property taxes are taxes levied on real estate, including land and buildings. These taxes are assessed by local governments and are used to fund various public services and infrastructure projects .

2. Tax Map Key Number: Homeowners should know their tax map key number, also known as the Parcel ID number. Real property is mapped and indexed numerically according to a tax map key system, which identifies the property. This number is important for referencing and expediting customer service related to the property .

3. Calculation of Property Taxes: Property taxes are typically calculated based on the value of the property and the property tax rates set by the local government. The value of the property is usually determined by assessors who consider factors such as the sales prices of similar properties in the area and features that could influence the property’s value .

4. Funding Public Services: Property taxes play a crucial role in funding various public services and infrastructure projects. These services may include fire and police protection, road maintenance, street lighting, sewer treatment, transportation, parks and recreational facilities, and more. The revenue generated from property taxes helps support these essential services .

5. Homeowners’ Tax Credits: Some jurisdictions offer homeowners’ tax credit programs to provide relief to homeowners whose property taxes exceed a certain percentage of their gross income. These programs set a limit on the amount of property taxes homeowners must pay based on their income .