Property tax can be the most fair and at the same time not so fair tax collected by the municipality.
The two determining factors in how it can affect what a person will pay for this type of tax are where you live and the economic condition of the person.
While we can all appreciate the good points of owning a home vs. renting, in terms of property taxes, renting is by far the better option. The state will levy property taxes on the following:
Any property additions such as land improvements
The land itself
Any non-permanent structure on the property
Assessments are usually made by the exclusive local tax collector in each state. Individual property and land will be assessed for value and subsequently sent as a tax payment notification. This is usually paid through the homeowner’s escrow amount stated on their mortgage.
Often this can have a negative impact on property or land owners as taxes in certain states can sometimes be doubled or tripled and render homeowners unable to pay their taxes, forcing them to sell their property or land.
People with fixed incomes such as seniors who have retired, can be greatly affected by the increase in property taxes. The value of their home increases, but at the same time they find themselves unable to pay taxes because their income is decreasing. Unfortunately, property taxes don’t leave much wiggle room in the event of a natural event or personal tragedy.
While 2.3 seems to be an average percentage for property taxes, it varies so much from state to state, that it seems very unfair for certain states like New Hampshire, where it is high at 4.9 percent.
It also seems unfair when a state like Alabama pays 1.3 percent, but only so far in neighboring Georgia will be required to pay 2.6 percent, even more so in Florida at a 3.1 percent rate.
So who determines how the money generated from this income is spent or in some cases wasted? State legislatures will determine this along with decisions to increase or decrease property taxes and how often they are collected.
While property taxes can actually help states with income, the amount of property taxes that must be paid can be a determining factor in a person’s decision on where to live to achieve the American Dream of land or home ownership.