Knowing the costs of homeownership is an important part of the process before you buy. There will be other expenses, like property taxes, beyond your monthly mortgage payment, such as property taxes.
Understanding property taxes in your area is an important part of the process. Here’s a look at property taxes in general, including how they’re calculated.
What are property taxes?
Homeowners all across the United States, West Texas residents pay taxes on their home to support local public services. Property taxes are a major source of income for local and state governments who budget a certain amount of money each year to cover their expenses for services such as:
- Public transportation
- Street landscaping and lighting
- Parks and Recreation
- Local schools
- Emergency services
A tax assessment is the means by which your property taxes in your town are determined. It’s an opinion of value on each home, with a higher value of a home resulting in higher property taxes. Your home’s assessed value is a yearly estimation based on prevailing local market conditions, including what similar properties are selling for, replacement costs for the property, maintenance costs, and whether any improvements were made to the home.
How is a tax assessment conducted?
State laws and regulations determine the exact procedure a property assessor follows. But, generally speaking, he or she organizes a community’s properties into different groups based on similar characteristics. Comparable sales of those properties are then analyzed to determine the average sales price for each group. Individual aspects of each home are taken into consideration, including geographic location and square footage. It’s important to note that homes which cost the same may have different property taxes based on the neighborhood in which they’re located.
When an assessed value is reached for a home, municipal governments use a tax rate formula to calculate your final property tax. Again, the formula is designed to make sure that a community has enough money budgeted for necessary public services.
Tax assessment vs. a Home Appraisal
It’s important to note that your tax assessment is different than your home appraisal. While a home appraisal also provides a market value of a home, it’s often used for other purposes, such as the value of collateral for a home mortgage.
Can your appeal your tax assessment?
While you cannot contest your property tax rate, you can contest your home’s assessed value. For instance, you can appeal if you feel like the assessor incorrectly calculated your home’s square footage, or valued your property incorrectly. Check with your local assessor’s office to find out how the appeal process works.
If you’re buying a home in the West Texas area, it’s important to have People That You Know to guide you through the process. The Peoples Bank Home Loan Center team of Renessa, Lacie and Cody have the experience and expertise to best help you.