End of September is either marked or unmarked in the calendars of homeowners. This is the date set to pay real estate taxes. And it is noted that there will be an increase effective in 2016.
Capital Gazette mentions that most if not all homeowners do not pay attention much when it comes to paying their property taxes because it's normally paid automatically. Real property tax's payment is done through their mortgage escrow account. It is compared to income tax withholdings, "its out-of-sight, out-of-mind" kind of expense..
However, real property tax is a significant expense. Paying an amount of $7,000 or $8,000, (average real estate tax in City of Annapolis) is a fairly large amount. Other home owners pay more than $7,000. For example, a house with "6 cozy bedrooms, 11 bath waterfront in Wardour, where the annual real estate tax bill is over $75,000!" That amount is no joke already, so it is important to know how your property tax is computed including "the degree to which the numbers used are an accurate reflection of the property's value."
There are two mathematical components that are used to ascertain the property tax. These are the tax rate and the assessed value of your property. Obviously, the tax rate differs from one state to the other since it is based on its local legislative body who approves their estate taxes. Anyway the RPT is determined by multiplying the tax rate by the assessed value.
"For example, the 2014-2015 state tax rate is 11.2 cents for every $100 of assessed value. So, if your property is assessed at $500,000, the state portion of your tax bill would be .112 x 5000 or $560. You must then add to that county taxes, which vary from county to county. In Anne Arundel, the 2014-2015 rate is 94.3 cents for every $100 of assessed value. In our example, that would make the calculation .943 x 5000 for $4,715. Add the state tax of $560 to the county tax of $4,715 and you get your total tax bill of $5,275."
However, it has been noted that while a home owner can have the basic components in identifying his estate tax bill, there are also other factors that may alter the computation. Some estates have "Homestead Tax Credit, Refuse charges and/or fees for Special Taxing Districts."
In a separate report concerning real estate taxes, Loop North says there will be a substantial increases expected by landlords in 2016 most especially in Chicago. According to the report, Chicago home owners including apartment owners are appalled at the news about the large increase of real estate tax. The figures show an increase of 30-55%, when the city has been reassessed.
"Experts say the assessment increases likely will mean hefty real estate tax hikes next year and landlords will be forced to raise rents to cover the expense."
But why there's an estate tax hike? Report says that "the main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2014 tax bills will see sharply increased spending for schools and community colleges."
This is the reason why, a homeowner needs to know how he is billed with his tax, and probably know also where his tax being spent.
Whether one admits it or not, a tax is a significant expense. If the government says that there will be a substantial increase in RPT, then it is also good to know why, then maybe know the exemption that one can possibly avail.
