What is a Property Tax Assessment

Legal Article

What is a Property Tax Assessment

A property tax assessment is a professional estimate that seeks to determine the market value of a property. Property tax assessments are important as local governments use this estimation to determine your yearly property tax bill. Most counties will prepare and release their property tax assessments on the same day each year. Further, counties will typically base these assessments on recent sales of similar properties.

Property taxes pay for the majority of schools, parks, and recreation areas, government salaries, transportation infrastructure, local law enforcement, and fire departments. Because of the many different programs property taxes pay for, accurate property tax assessments are extremely important for local governments. One other note is that certain religious buildings and land are exempt from property taxes.

What is a Property Tax Assessment

The first part of your property tax assessment is to determine your property’s market value. After determining your property value, a county will then set taxes using a base rate that applies to all properties within the county. There are two main ways counties determine the tax base rate. The first-way taxes counties calculate property taxes is for example, by charging homeowners $10 for every $1,000 worth of property they own. The other way counties determine property taxes is by using a multiplier or mill rate. A mill rate is one-tenth of a cent or $1 per $1,000 of assessed property value. Thus, if your county uses this rate, you would dived your property value by 1,000 to determine how much you will owe in property taxes.

How Does a Property Tax Assessment Work

As stated above, property tax assessments are typically completed at the same time—though this timing will vary depending on the county. For example, some jurisdictions require property tax assessments every year, every other year, or every five years. Additionally, some counties require new property tax assessments to be completed when the property is purchased or inherited. As a general rule, you should expect that each time your property is appraised, its value will increase—along with your property taxes.

The value of your home will normally increase each year. However, property owners have the ability to appeal assessments that they feel are inaccurate. However, property owners typically only have a few weeks to appeal this decision after the assessment.

Types of Property Tax Assessments

Though every county is different, local government typically use one of the following three methods when assessing property.

  • The replacement method: The replacement method—also known as the cost method—tries to state how much it would cost to completely replace the property if it needed to be completely rebuilt. This cost would include the current rates for labor and materials in the area. Finally, the depreciation is deducted from the price of the property.
  • The sales comparison method: Also called the market approach, this appraisal option allows counties to valuate properties based upon the sale price of similar homes in the area. This is simply a baseline value, however, as the property value can be an increase or decreased depending on the unique qualities of the property.
  • The income method: The income method is only used for commercial properties and the property value is assessed based on the amount of income your property generates and then adjusted by other factors such as business taxes, insurance costs, and operating expenses.

Do I Need to Pay Property Taxes

Homeowners must pay property taxes even after they pay off their mortgage. Many include property taxes in their mortgage payments. However, your property taxes simply become a separate bill after you pay your home off. Most local governments give homeowners opportunities to reduce their assessments. For example, you may be able to claim a homestead exemption if you live on the property. Additionally, most localities allow seniors who no longer work to use a property tax rebate. In most cases, property tax rebates eliminate this tax for seniors.

Final Thoughts

With over 20 years of experience, Antonoplos & Associates real estate attorneys have the knowledge and experience required to assist clients with real estate litigation in DC, Maryland, and Virginia. Furthermore, our attorneys have a strong background in real estate, construction law, and business law. Thus, we can assist clients with a variety of real estate litigation issues.

Contact Our DC Law Office for More Information

Finally, for more information regarding what is a property tax assessment, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.