Difference Between Property And Real Estate Taxes
| If you left your child a home worth $1 million, you can be sure that your child would still not be able to afford it because of real estate taxes. Usually many first home buyers forget that they have to pay real estate taxes to the government and it all depends on where you purchase the home.
Real estate taxes are levied by counties where the home is located and with the rising real estate prices, the taxes can be quite significant. In fact, many feel that real estate taxes can be a deciding factor whether or not to purchase a home.
On the other hand, it is this tax that helps to fund our schools, police, roads and other municipal services. So they are important in that sense. The amount of real estate taxes you pay is dependent on the value of your property and then the state along with the county factors in a formula to get the exact amount. However, you can get an estimate by keeping aside 1.2 percent of the purchase price of your home as real estate taxes. In addition, these taxes have to be paid every year.
In contrast, a property tax, also known as millage, is the tax that an owner pays on the value of the property he owns. This property can be land, building, and other movable man-made things. This tax is an ad valorem tax and certified appraiser performs an appraisal to determine the monetary value of your property and after that you are taxed proportionately. Once again, property taxes vary from one jurisdiction to another. Property taxes are collected by counties, cities and districts.
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