?
Real estate taxes, also known as property taxes, are taxes imposed by local governments on the value of real property. Property taxes are a significant source of revenue for local governments, and they are used to fund public services such as schools, fire protection, sanitation services, and police protection.
How Are Real Estate Taxes Calculated?
Real estate taxes are usually calculated as a percentage of the assessed value of a property. Typically, the local government assesses the fair market value of a property and then multiplies the assessed value by the applicable tax rate. The rate is usually set by the governing body of the local jurisdiction. In some states, different tax rates may apply to different types of property, such as residential and commercial. Property tax rates also vary from jurisdiction to jurisdiction.
What Are Some Examples of Real Estate Tax Use?
- Schools: Real estate taxes are used to fund public schools and are one of the main sources of funding for public education.
- Public Safety: Real estate taxes are used to pay for police and fire protection services.
- Infrastructure: Real estate taxes are used to pay for infrastructure improvements and repairs, such as road maintenance.
- Social Programs: Real estate taxes are used to pay for social programs, such as housing assistance and poverty relief.
- Public Services: Real estate taxes are also used to pay for public services, such as garbage collection, water and sewer services, and snow removal.
Are Real Estate Taxes Deductible?
In some cases, real estate taxes may be deductible on your federal tax return. However, it is important to note that only certain types of property taxes are deductible, such as taxes imposed for community services. It is best to speak to a tax professional to determine if your real estate taxes are deductible.