What sort of real estate do you own, commercial, meaning office or warehouse/industrial type real estate or are you more into residential property?
I assume you pay taxes of some sort on this property, how are they determined? Does someone from the local/county/state assess some sort of property value and then calculate taxes based on that? Are there multiple factors other than or in addition to assessed property value in determining tax rates? How closely does assessed value (if applicable) match estimated market value? Have your property taxes ever gone down from one year to the next?
All sorts of questions but I think I’ll stop here for now.
In Colorado the county assigns amounts to different taxes such as local schools, fire, local township, parks & rec, etc. Interestingly the taxes are called a mill levy because the amounts are in mills (1/1000 of a dollar) per dollar value of the property. Then the assessor assigns a value to your property and house. However in Colorado you do not pay the mill levy on the full value of the property and house; you pay it on a percentage of the property (the percentage is based on usage. Agriculture use is adsurbly low) called the appraised value so it looks like this
Total mill levy = 117.247
Actual value = $427,616
Appraised value = $28,930
Property taxes = 28930 x (117.247 / 1000) = $3391.96
Appraised value =
I own residential property—the house I live in, and a condo I used to live in, which I rent out.
The assessed value can be appealed. I’ve never done it, and don’t know how successful it would be if I tried. The assessed value is less than the estimate from Zillow and other places, so I’ve always assumed an appeal would be a waste of time.
I don’t think my property taxes have ever gone down. Assuming I still live here, they will when I turn 65. Colorado has some discounts they apply to people at 65 who have lived in the same house for 10 or more years.
For my house I just pay the property taxes with regular salary that I also pay income tax on. For the condo, the property taxes are deducted from the rent I receive when figuring out how much federal tax I owe on the income from the rental property.
So if I collect $12,000 in rent, pay $2,000 in property taxes, and have $2,000 in other rental expenses, then I have to pay income tax on $8,000.
My local authority collects a ‘council tax’, which pays for roads, schools etc.
It’s based on the property value from a survey years ago.
As I’m single, I get a discount.
So property taxes for you are based(in part at least) on the number of people living in a home? Am I understanding that correctly?
Where I live, the county assesses your property for a certain total value. This is comprised of the value of the land plus the value of any “improvements” meaning buildings. If I own two houses, I pay full tax bill for the one I don’t live in but get a homeowner’s discount for the one I do live in. Also there is what is called a “circuit breaker” that limits how much seniors living on limited fixed income have to pay, to avoid having them taxed out of hearth and home.
As hajario pointed out, YMMV depending on state. In California, so many retirees were being being forced out of their home due to property tax on their now very valuable homes that voters passed the (in?)famous Proposition 13. In California, the appraised value is recalculated only upon ownership change. Barring that, appraised value can increase only up to 2% per annum and property taxed can, at most, be 1% of the appraised value.
Same here. For a lot of Coloradans that own huge ranch/farmland this results in them splitting the parcel so that most of the land is taxed at the almost nil Ag rate while the house sits on a parcel barely bigger than the footprint to be taxed at the Residential rate.
Also, a few years ago Colorado cracked down on people calling their land agriculture use to make it so that there are now very specific uses required to get that huge discount. Because our 40 acres of vacant land in Colorado doesn’t fall into any of those uses, our tax bill went from a few dollars to a few hundred dollars.
As I understand it, my local Council has a ‘value’ for each property. (Mine, like most others assessed years ago is probably somewhat out-of-date, but still serves as a basis.)
The only factor about residents is that single people get a discount (25%, I think.)
I can either pay a lump sum at the start of the year (gets me a small discount) or pay monthly.
This thread is actually a good reminder. It’s time to pay the second half of my taxes on my condo, because they’re due on June 15.
In the US, if you have a mortgage, then property taxes are usually collected by the mortgage servicer (along with insurance), and put in an escrow account. When due, the money in the escrow account is used to pay the property taxes to the county. There is no extra interaction necessary by the homeowner: pay the mortgage bill, which includes taxes, and it is all taken care of.
I do not have a mortgage on the condo, so I have to remember to pay the taxes myself. I get one bill from the county. I then have the choice of making a single payment, or paying half in February, and half in June. There is no discount for paying the full amount early.
In Maryland, the County estimates the value of your house and land and calculates your property tax as a percentage. I think in my case it’s about 1.5 percent. I pay a set amount to my mortgage servicer monthly and they pay the County twice a year.
There is a way to appeal if you think your value is too high but I’ve never done so. There is a provision that limits increases if you live in the home, but no discount for number of residents.
One thing that some states do that Maryland doesn’t is assess the value of the land separate from the structure and have a different rate for each
Almost. If you make improvements, you may get an increase in accessed value based on the value of the improvements. Our went up a tad when we put in central A/C.
Anyhow the California rules means that nearly identical houses next to each other may have dramatically different property taxes.
I expect that here in the US, taxes on real estate are probably similar enough that they’re not difficult to figure out from state to state. The notion of giving a single person a reduction of their tax bill real grabs my interest. Do you know the reasoning and history behind the “single person discount”?
Why do you think that? I live in a state small enough that property values are determined statewide. I believe that is the exception and it’s done at the county or town level in most states. The valuations are often disconnected from actual sale prices. It is quite common for property values to be reassessed only when properties are sold, so two identical properties may be have greatly different valuations depending on how long since the they last changed hands. And finally, the taxes based on a valuation are not at all the same state by state or even town by town within the same state.
Here in the US valuations are often adjusted for any reason people can think of. The reasoning is ‘because they can’, which is pretty much the history also. The system is rarely fair, so asking for exceptions is as American as apple pie. When I was selling my house in New York I asked for a reduction in my property taxes to make the property more attractive on the market. The town would say this would help balance the nearly arbitrary valuations of properties throughout the town. It was very easy to get done by starting with a campaign contribution to the mayor and ending with $1000 reduction in annual taxes.
The Business section of the national version of the NY Times has a column comparing three properties of roughly the same value scattered across the country. They give estimated property taxes, and they vary wildly, with Texas usually being at the top. There is no way of guessing what the tax is without looking at comps.
Did you have to pull a permit? That’s the only way they’d know. They have no idea about any of my improvements other than the new roof.
Yep. The neighbor next door bought his house when it was new in 1960. He pays $1200/year. I bought in 1993 and pay $4200. The dude down the street who bought at the Covid crazy peak pays over $20k.
My town is very serious about permitting. You might get away with it - until you try to sell the house. (I know someone who ran into this and it was for a minor improvement.) Plus, I don’t think I’d trust a contractor who didn’t get a permit as part of the job. Good way of losing a license.
For the amount our houses are worth these days it just isn’t worth doing it wrong, unless you plan to die in the house, in which case it won’t be your problem.
I would get a permit if it was legally required. I didn’t need one for a window replacement or bathroom remodel and why get one for that unless walls are being replaced or something like that?
Lots of work doesn’t require a permit - I had a ductless mini-split system installed last year and no permit was required. I would have needed a permit if the equipment was on the roof, but it isn’t. I changed my kitchen - but I basically changed the cabinets, appliances and floor tiles. No permit needed, no changes to wiring or plumbing or walls