What are property taxes?

Property taxes are taxes imposed by the government on real estate. They are typically based on the assessed value of the property and are used to fund public services such as schools, police and fire departments, and roads. The taxes are usually collected by local government, such as a county or municipality.

The assessed value of a property is determined by an official known as an assessor. Assessors use a variety of methods, including inspections and comparable sales data, to determine the value of a property. The assessed value is then used to calculate the property taxes owed by the owner.

The property tax rate, also known as the millage rate, is set by the local government and is usually expressed as a certain number of mills per dollar of assessed value. For example, a millage rate of 50 mills per dollar of assessed value would result in property taxes of $50 for every $1,000 of assessed value.

It's important to note that property taxes can be appealed if the homeowner believes the assessed value of the property is too high. Additionally, some states offer property tax relief for certain groups such as veterans, senior citizens, or low-income families.

Although payment of property taxes is a cost that sometimes occurs during closing, CapCenter does not consider property taxes a closing cost because these costs are not associated with processing the application but are associated with owning a home. Property taxes, including the rate and time of payment, vary based on property and region and whether the taxes are prepaid or paid in arrears.