U.S. real estate properties are taxed by their federal and state governments. The taxes of these properties are basically the major source of local government revenue. Property tax rates which are in percentage form would usually be decided by city councils, town boards, village boards, county legislatures and school boards and are collected every year by municipalities like counties, cities and districts. Annually, around September or October, budget hearings are conducted by the board to be able to find out exactly how much funds would be needed for their operations the succeeding year. The tax rate would then be determined through dividing the total taxes of the board by the jurisdiction’s total assessed value.
There is a special purpose to property taxes, as the funds that are collected from the taxpayers would be used by the municipalities to be able to improve the vital infrastructures and public facilities like sewers, schools, libraries, fire station, parks, hospitals, roads and bridges.
The laws on the different real estate property aspects, as well as the forms of property tax actually vary from one state to another. But, there is a standard formula that is used in computing property taxes on homes. The usual process would involve the multiplication of the property’s assessed value with the prevailing tax rate.
The property tax rate is also known as millage rate, millage tax or mill levy. One mill would be equal to a thousandth of a dollar. The owner of a property would need t pay a dollar for each $1000 that is taxable.