Understand Your Property Taxes With Confidence
Property taxes are an important part of homeownership. Learn when they are typically due, what your tax bill means, and what steps you can take if you believe your property has been assessed too high.
Explore the GuideFrom understanding your assessment to protesting your taxes, we're here to make the process easier to navigate.
What exactly are property taxes?
Property taxes are taxes charged by local governments based on the value of real estate you own. These taxes help fund essential community services such as schools, roads, emergency services, libraries, and other local programs.
Your property tax bill is generally based on your property's assessed value and the applicable local tax rate. Because tax rules and payment schedules vary by location, it's important to understand how your local taxing authority handles assessments and payments.
When do homeowners pay property taxes?
Property tax schedules vary by state, county, and municipality. Some homeowners pay directly to their local tax authority, while others have taxes collected through their mortgage escrow account.
Tax Assessment
Your local taxing authority determines an assessed value for your property according to local rules.
Tax Bill
A property tax bill is issued showing the amount due, payment dates, and applicable taxes or assessments.
Payment
Depending on your location and mortgage arrangement, you may pay the taxing authority directly or through your escrow account.
Keep Your Records
Save your tax bills and payment confirmations so you can easily reference them when needed.
What determines your property tax bill?
Your property tax bill generally depends on two major factors: the assessed value of your property and the tax rate established by the applicable taxing authorities.
Assessed Value
The value assigned to your property for taxation purposes. This may be different from the current market value of your home.
Tax Rate
The rate applied to the taxable value of your property. Rates and the taxes included in your bill vary by location.
Your tax assessment isn't necessarily the same thing as your home's market value.
If you're unsure how your property's assessed value was determined, check with your local appraisal or tax authority for the rules that apply in your area.
You may have the right to protest your assessment.
If you believe your property's assessed value is inaccurate, many jurisdictions provide a formal process for challenging the assessment. The exact process and deadlines depend on where your property is located.
Review Your Assessment
Start by reviewing the property information and assessed value listed by your local appraisal or tax authority.
Check the Deadline
Find out when protests must be submitted. Missing the deadline may prevent you from challenging the assessment for that tax year.
Gather Supporting Information
Comparable properties, recent sales, property condition, photographs, and other relevant documentation may help support your position.
Submit Your Protest
Follow your local authority's instructions for submitting an appeal or protest and providing supporting evidence.
Questions worth asking about your assessment.
A little preparation can make it easier to understand whether your assessment accurately reflects your property.
Is the property's square footage listed correctly?
Are the number of bedrooms and bathrooms accurate?
Are property improvements or features recorded correctly?
How does your assessment compare with similar properties?
Are there recent comparable sales that may be relevant?
What is the deadline for filing a protest in your area?
What if your mortgage pays your property taxes?
If your mortgage includes an escrow account, your lender may collect money for property taxes and insurance as part of your monthly mortgage payment.
The lender or mortgage servicer generally uses those funds to make the applicable payments when they become due. Even when your lender handles the payment, it's still a good idea to review your tax bill and escrow statements.
If your payment changes unexpectedly, review your escrow analysis or contact your mortgage servicer for an explanation.
Don't let these property tax details catch you off guard.
Ignoring the Notice
Assessment notices and tax bills can contain important deadlines. Don't assume you can address them later.
Missing a Protest Deadline
Appeal windows are often limited. Check your local authority's deadline as soon as you receive an assessment.
Assuming Market Value Equals Tax Value
Tax assessments and market valuations can be calculated differently and may serve different purposes.
Forgetting to Review Escrow
If taxes are paid through escrow, changes in taxes can affect your monthly mortgage payment.
Have questions about how property taxes affect your home?
Property tax rules, assessment methods, deadlines, exemptions, and protest procedures vary by location. Before taking action, confirm the current requirements with your local appraisal or taxing authority.
Talk With Our TeamImportant: This guide is provided for general educational purposes and is not tax, legal, or financial advice. Property tax laws, deadlines, exemptions, assessment practices, and payment requirements vary by jurisdiction. Always verify current requirements with your local taxing authority or a qualified professional.
