Most local governments in the United States impose a property tax , also known as milling level , as the main source of revenue. This tax may be imposed on real estate or personal property. Taxes are almost always counted as fair market value of the property times the valuation ratio is multiplied by the tax rate, and is generally the liability of the property owner. The value is determined by a local official, and may be disputed by the property owner. For tax authorities, one advantage of property taxes on sales tax or income tax is that income is always the same as a levy tax, unlike other taxes. Property taxes usually generate the income required for city tax levies. The disadvantage to the taxpayer is that the tax liability is stipulated, while the income taxpayer does not.
The tax is managed at the local government level. Many countries set limits on how local jurisdictions may impose property taxes. Because many properties are taxed by more than one local jurisdiction, some states provide methods in which values ​​are made uniformly among those jurisdictions.
Property taxes are rarely self-accounted by the owner. Tax becomes a legally enforceable obligation attached to the property on a certain date. Most countries charge taxes that resemble property taxes on vehicles registered in the state, and some states tax a few other types of business properties.
Video Property tax in the United States
Basics
Most state-level jurisdictions in the United States impose a tax on interests in real property (land, buildings, and permanent repairs) that are deemed to be under state law for ownership purposes. The rules vary greatly according to jurisdiction. However, certain features are almost universal. Some jurisdictions also impose taxes on certain types of business personal property, especially inventory and equipment. Countries generally do not impose property taxes.
Many overlapping jurisdictions may have the authority to impose a tax on the same property. These include districts or parishes, cities and/or cities, school districts, utility districts, and different taxation authorities by country. Some countries impose a tax on property values. Taxes are based on the fair market value of the subject property, and are generally attached to the property on a given date. The property owner on that date is responsible for the tax.
The tax amount is determined annually on the basis of the market value of each property on a given date, and most jurisdictions require periodic reassessment of value. The tax is calculated as the market value determined times the valuation rate multiplied by the tax rate. The appraisal rate and tax rate vary between jurisdictions, and may vary by type of property within the jurisdiction. Most legislative jurisdictions determine their tax assessment and rate ratios, although some countries impose restrictions on those determinations.
The tax assessor for tax jurisdiction determines the value of the property in various ways, but it is generally necessary to base the determination on a fair market value. A fair market value is that prices for willing and informed sellers will sell the property to buyers willing and informed, not under any coercion to act. When a property is recently sold among unrelated sellers, the sale establishes a fair market value. In other cases ( i.e. , mostly), its value should be estimated. Common estimation techniques include comparable sales methods, depreciated cost methods, and revenue method approaches. The property owner can also declare a value, which may be changed by the tax assessor.
Once the value is determined, the appraiser usually notifies the last known property owner of the value determination. Such notification may include the amount of tax calculated. The property owner can then follow the value. Property values ​​should generally be reviewed by the review board or similar body, before the property owner can follow the determination.
Once the value is settled, the property tax bill or notice is sent to the property owner. Payment times and conditions vary widely. If the property owner fails to pay taxes, the tax jurisdiction has various solutions for collection, in many cases including confiscation and sale of property. Property tax is a liens on the property where the transfer recipient is also subject.
Maps Property tax in the United States
Property is taxed
Almost all property taxes impose real property tax jurisdictions. This includes land, buildings, and all repairs (often called fixtures) that can not be removed without damaging the property. Property taxes include homes, farms, businesses, and most other properties. Many jurisdictions also impose taxes on certain types of other properties used in a business. Existing property and located in jurisdiction on a particular date is subject to this tax. This date is usually January 1 of each year, but varies among jurisdictions. Properties owned by educational, charitable, and religious organizations are usually excluded.
Tax rate
Tax rates vary among jurisdictions. They are generally established by governmental bodies of tax jurisdiction. The method of determining tariffs varies greatly, but may be restricted by certain state laws. In some jurisdictions, property is taxed on the basis of classification. Classification is a grouping of properties based on similar usage. Examples of classification are residential, commercial, industrial, empty, and damaged property. Property classification is used for property taxes at different levels and for different public policy purposes. In Washington D.C. for example, property occupancy is given incentives by imposing a residential property tax of 0.85 percent of the assessed value but an empty residential property at 5 percent of the assessed value.
Value or millage
The tax rate is the percentage of the assessed value of the property taxed. This is in some cases expressed as a "millage" or dollar tax per thousand dollars of the assessed value.
Assessment rate
Most jurisdictions set taxes on some portion of fair market value, which is referred to as the rating ratio. This ratio may vary depending on the type or use of the property. The rating ratio may, in many jurisdictions, be amended from year to year by governmental agencies of tax jurisdiction. Changes in the tax rate or rating ratio may have the same practical effect as changing the net tax due on a particular property.
Assessment
Determining the value of a property is an important aspect of property taxation, since it determines the amount of tax payable. Various techniques can be used to determine the value. Except in the case of properties that have recently been sold, the assessment has some inherently subjective aspects. Values ​​may change from time to time, and many countries require tax jurisdiction to make up for the value every three or four years. Property values ​​are often determined based on the use of the current property, not the potential use. The value of a property is determined on a particular scoring date for each jurisdiction, which varies greatly.
Who determines the value
The property owner can make a declaration of the value of the property they have to the tax authority. This is often referred to as rendition. The tax authority may accept this value or make its own determination. Value determination is generally made by tax assessors for tax authorities. Some countries require a uniform value to specify for each particular property.
Market value
Property values ​​are generally based on the fair market value of the property on the date of valuation. Fair market value has been defined as the price to be purchased by a willing buyer and informed to an unrelated and unrelated knowledgeable seller where no party is obliged to act. The sale of certain properties between unrelated people generally definitely sets fair market value on the date of sale. Thus, selling the same property recently provides good evidence of market value. Where there is no recent sale, other techniques should be used to determine market value.
Assessed value
Many jurisdictions impose a tax on value that is only part of the market value. This assessed value is the market value multiplied by the valuation ratio. Assessment ratios are often set by local tax jurisdictions. However, some countries impose limits on the ratio of valuations used by tax jurisdictions within the country. Some of these limitations vary by type or use of the property, and may vary by jurisdiction within countries. Some countries impose restrictions on the extent to which the assessed value may increase.
The equation between jurisdiction
Many countries require that some tax jurisdictions that burden the same property should use the same market value. Generally, such a country provides a equivalency board or similar body to determine the value in case of dispute between jurisdictions.
Assessment techniques
Tax assessors can use various techniques to determine the value of unsold properties. Determining which techniques are used and how to apply them inherently involves assessment.
Comparable sales
Values ​​can be determined based on recent comparable property sales. The value of most homes is usually determined by comparable home sales in the immediate area. Assessment adjustment may be required to achieve comparability. Among the factors considered in determining whether a comparable property is:
- Property properties (home, office building, vacant lot, etc.)
- Locations
- Size
- Property usage (residential, commercial, agricultural, etc.)
- Properties of improvement
- Building type and usage
- Building features (number of bedrooms, facility level, etc.)
- Age increase
- Property desires (view, proximity to school, access type, interesting features around it, etc.)
- Restrictions on property (usage rights, restrictions on building code, physical constraints, etc.)
- Property utilities (soil fertility, drainage or lack thereof, environmental issues, etc.)
- General economic conditions
Cost
Where recent property sales are not available, a cost-based approach can be used. In this approach, the original cost or property replacement is reduced by an allowance for impairment (depreciation) of the repairs. In some jurisdictions, the amount of depreciation may be restricted by law. Where the original cost is used, it may be adjusted for inflation or increase or decrease the cost of building repairs. The cost of replacement can be determined by the estimated cost of construction.
Earnings
Alternative valuations can be used for income-generating properties based on economic concepts. Using the revenue approach, the value is determined based on the present value of the expected income stream from the property. The selection of an appropriate discount rate in determining present value is a major valuation factor that influences assessments based on this approach.
Custom use values ​​
Most tax jurisdictions specify that the property used in any one of several behaviors is subject to special assessment procedures. This is usually applied to properties used for agriculture, forestry, or other common use in jurisdiction. Some jurisdictions assess properties on "highest and best use", with some of them providing exceptions for home or farmland. Special assessment issues vary greatly among jurisdictions.
Revaluation
All tax jurisdictions recognize that property values ​​may change over time. Thus, values ​​must be periodically redefined. Many states and regions require that property values ​​be redefined at three or four year intervals. Such reassessment may follow the above scoring principles, or may use bulk assessment techniques.
Limit on increase
Some jurisdictions have set limits on how much property value can be increased year by year for property tax purposes. These limits may be applied annually or cumulatively, depending on jurisdictional rules.
Assessment process
The assessment process varies greatly according to jurisdiction for procedures and time. In many states, the assessment and collection process can be seen as a two-year process, in which the value is determined in the first year and the tax is valued and paid in the second year. Most jurisdictions encourage property owners to declare the value of their property at the beginning of the appraisal process. Property owners in all jurisdictions are granted the right to appeal against the determination of tax authorities, but the rights vary greatly.
Assessment by appraiser
Jurisdictions impose property taxes uniformly fill some officials by determining the value of property subject to tax by jurisdiction. This official may be an employee or contractor to a tax-impersoning government, and is commonly referred to as a tax assessor in most jurisdictions. Some tax jurisdictions may share the general tax assessor for some or all of the properties within the jurisdiction, especially when jurisdiction overlaps.
The tax assessor must first determine what property is taxed, prepare the list or scroll of the property. In many jurisdictions, the tax assessor notifies the last known owner of each property that the property is taxed. The tax assessor must determine the value of any property taxed. Often, the value used is the value of the previous valuation, may be increased or decreased by factors determined by the tax assessor.
Notice to owner
After the determination of the value, the tax assessor is generally required to notify the property owner of the specified value. Procedures vary according to jurisdiction. In Louisiana, no formal notice is required; on the contrary, the appraiser "opens" the books to allow the property owner to see the assessment. Texas and some other jurisdictions also require that such notices include very specific items, and such notices may include some tax jurisdictions. Some jurisdictions provide notice made by publishing a list of properties and values ​​in a local newspaper.
In some jurisdictions, such notification is only necessary if the value increases more than a certain percentage. In some jurisdictions, a notice of value may also constitute a tax bill or an assessment. Generally, an owner notices start a limited period as long as the owner can match his value.
Review
Property owners are almost always entitled to discuss appraisals with tax assessors, and such discussions may result in changes in assessors' assessments. Many jurisdictions provide a review of value determination. Such reviews are often carried out by the review board, often consisting of jurisdictional residents unrelated to government jurisdiction. In addition, some jurisdictions and some countries provide additional review bodies.
Protest
Almost all jurisdictions provide a mechanism to challenge the determination of the value of the appraiser. Such mechanisms vary widely.
Judicial appeal
All jurisdictions levying property taxes should allow property owners to go to court to follow assessments and taxes. Procedures for such judicial appeals vary greatly. Some jurisdictions prohibit legal appeals until administrative appeals run out. Some allow binding arbitration.
Tax levy
The tax is levied on the tax rate and appraisal ratios applicable for the year. Collect taxes on jurisdictions to levy taxes on property following the initial or final value determination. Property taxes in the United States are generally only because tax jurisdictions have levied taxes. The form of user charges or bills varies, but is often done by sending tax bills to property owners or mortgage companies.
Exceptions and incentives
Tax jurisdictions provide a variety of methods that property owners can use to reduce taxes. Almost all jurisdictions provide exclusion of homesteads that reduce taxable value, and thus tax, from one's home. Many give extra exceptions to veterans. Tax jurisdictions may also offer temporary or permanent full or partial exclusions of property taxes, often as incentives for certain businesses to place locations within jurisdictions. Some jurisdictions provide widespread exclusions from property taxes for businesses located in certain areas, such as the corporate zone.
The largest property tax exemption is the exception for registered non-profit organizations; the 50 states fully exempt these organizations from state and local property taxes with a 2009 study that estimates that tax-exempt tax income exceptions ranged from $ 17- $ 32 billion per year.
Exceptions can be very important. In New York City alone, an Independent Budget Office study found that religious institutions would be taxed $ 627 million annually without such an exception; all exclusion groups avoid paying a combined $ 13 billion in fiscal year 2012 (July 1, 2011 to June 30, 2012).
Payments
The timing and manner of paying property taxes vary greatly. Property taxes in many jurisdictions are due in a single payment on 1 January. Many jurisdictions provide payments in various installments. In some jurisdictions, the first installment payment is based on the previous year's taxes. Payments are generally required with cash or checks sent or sent to the taxation jurisdiction.
Lien and spasms
Property taxes are generally attached to the property; that is, they become a burden on the property that must be met by the current owners and the future. This attachment, or lien, generally occurs automatically without further action from the tax authorities. Lien is generally removed automatically after tax payment.
If the tax is not paid within a certain period of time (including interest, penalty, and surcharges), the sale of taxes is held, which may result in 1) the sale of the real property, or 2) the sale to a third party, which (after a certain period) take action to claim property, or force sales later to redeem the lien.
Attachment date
The tax lien is attached to the property on a certain date, generally the date the tax liability becomes enforced. This date varies by state, and in some states by local jurisdiction.
Misbehavior
Where the property owner does not pay tax on the due date, the tax authorities may assess the fine and interest. The numbers, times, and procedures vary greatly. Generally, penalties and interest apply in the same way as taxes, and attach to property.
Foreclosures and sales
When a property owner fails to pay taxes, the tax authority may act to enforce its lien. Enforcement procedures vary by country. In some states, lien may be sold by tax authorities to third parties, who may then attempt collection. In most states, the tax authorities may seize the property and offer it for sale, generally at a public auction. In some countries, the rights gained in such sales may be limited.
Tax administration
Property taxes are generally granted separately by each jurisdiction imposing a property tax, although some jurisdictions may share the administration of public property taxes. Often tax administration is carried out from the administrative office of tax jurisdiction (eg, town hall). Forms and organizations vary greatly.
Appraiser
Most tax jurisdictions refer to the assigned official determining the property value, appraising, and collecting property taxes as an appraiser. Assessors may be selected, appointed, leased, or contracted, depending on the rules within the jurisdiction, which may vary within a country. Appraisers may or may not be involved in tax collection. Tax assessors in some countries are required to pass a specific certification exam and/or have a minimum level of minimum property valuation experience. Larger jurisdictions employ full-time personnel in the tax assessment office, while small jurisdictions may only involve one part-time person for all tax assessment functions.
Constitutional Limitations
Property taxes, such as all taxes in the United States, are subject to restrictions under the United States and applicable state constitutions. The United States Constitution contains three relevant provisions: direct federal tax restrictions, equivalent protection rules, and the provision of privileges and immunities. Almost all state constitutions impose uniformity and equality rules. Most state constitutions also impose other restrictions, which vary greatly.
The federal government is generally forbidden to impose direct taxes unless the tax is then granted to the state in the proportion of the population. Accordingly, the ad valorem property tax has not been charged at the federal level.
States shall provide residents of other states of equal protection as taxpayers.
Uniformity and equality
The state constitution limits the tax authorities within the state, including local governments. Typically, this constitution requires that property taxes be equal or equally assessed. While many countries allow varying degrees of taxation among tax jurisdictions, most prohibit the same jurisdiction from applying different tariffs to different taxpayers. These provisions have generally been interpreted to mean that assessment and assessment methods should be consistent from one local government to another. Some state courts have stated that uniformity and equality requirements do not prevent the granting of individual tax credits (such as exceptions and incentives). Some countries allow different classes of properties (different from different taxpayer classes) to be assessed using different rating ratios. In many countries, the terms of uniformity and equality apply only to property taxes, leading to significant classification problems.
History
Property taxes in the United States come from colonial times. In 1796, state and local governments in fourteen of the fifteen countries were subject to land taxes, but only four tax inventories (shares in trading). Delaware does not levy property taxes, but rather income from it. In some countries, "all properties, with some exceptions, are taxed, in others, certain items are named, the land is taxed in one country according to the quantity, in others according to quality, and in one-third not at all. for assessments and tax collection in some cases inherent in the country itself, in other countries, to districts or cities. "Vermont and North Carolina levied taxes on a quantity basis, while New York and Rhode Island levied taxes on a value basis. Connecticut imposes taxes by type of usage. Procedures vary widely.
During the period from 1796 until the Civil War, a unifying principle developed: "taxation of all properties, moving and motionless, visible and invisible, or real and personal, as we say in America, at a uniform level." During this period, property taxes are valued on a value basis. It was introduced as a requirement in many state constitutions.
After the Civil War, intangible property, including company stock, took on a far more important role. Tax jurisdictions are difficult to find and impose this kind of property tax. This trend led to an alternative introduction to property taxes (such as income and sales taxes) at the state level. Property taxes remain the primary source of government revenue below the state level. Connecticut imposes taxes by type of usage. Procedures vary widely.
Tough times during the Great Depression led to high delinquency rates and reduced property tax revenues. Also during the 1900s, many jurisdictions began excluding certain property from taxes. Many jurisdictions exclude homes of war veterans. After World War II, some countries replaced exceptions under the terms of "circuit breakers" that limit the increase in value for residence.
Various economic factors have led to taxpayer initiatives in various countries to limit property taxes. California Proposition 13 (1978) changed the California Constitution to limit the aggregate property tax to 1% of "full cash value of the property." It also limits the increase in the assessed value of real property to an inflation factor that is limited to 2% per annum.
Policy issues
There are many policy issues regarding property taxes, including:
- Justice, or lack thereof
- Progresivitas, or lack thereof
- Administrability/socialist redistribution of taxpayer funds
- Allodial vs. title. Property Ownership
Apart from these issues, many aspects of property tax, and local government dependence as the primary source of income, remain the same since colonial times.
- Serfdom
Opinion on property tax
Sprawl
In the absence of city planning policies, property taxes on real estate change the incentives to develop land, which in turn affects land use patterns. One of the main concerns is whether it encourages urban expansion or not.
The market value of an undeveloped real estate reflects the current use of the property as well as its development potential. As an expanding city, relatively cheap and underdeveloped land (such as farms, farms, private conservation parks, etc.) increases in value because the surrounding area is developed into retail, industrial or residential units. This increases the value of the land, which increases the property taxes that must be paid on agricultural land, but does not increase the amount of income per land available to the owner. This, along with higher selling prices, increases the incentive to rent or sell farmland to developers. On the other hand, property owners who develop packages should pay higher taxes, based on the value of repairs. This makes its development less interesting than it should be. Overall, this effect results in lower density development, which tends to increase sprawl.
Attempts to reduce the impact of property tax on sprawl include:
- Land taxes - This method separates the value of the given property into the actual component - the value of the land and the value of the increase. Lower and lower gradual taxes are charged at higher rates and higher taxes are levied on land values ​​to ensure revenue neutrality. A similar method is known as split-rate taxation.
- Current valuation - This method assesses the value of a particular property only based on its current usage. Just like the land value tax, this reduces the effect of city encroachment.
- Conservation rights - Property owners add restrictions on properties that prohibit future development. This effectively eliminates development potential as a factor in property taxes.
- Exceptions - Exclude preferred classes of real estate (such as farms, farms, cemeteries or private conservation parks) from property taxes overall or rate them at a minimal amount (for example, $ 1 per acre ).
- Forcing higher-density housing - In the Portland, Oregon area, for example, local municipalities are often forced to accept denser, higher-capacity housing. This is governed by the multi-county development control board, in the Metro case of Portland.
- Urban growth limits or Green belt - The government states that some land can not be developed until the future date. It forces regional development back to the urban core, increasing the density but also the price of land and housing. This can also lead to development to pass through a limited use zone, occur in more remote areas, or move to another city.
Distribution
Property taxes have proven to be regressive (ie, fall disproportionately to lower earners) when not properly implemented because of their impact on certain low-income/high-income groups such as pensioners and farmers. Because these people have high assets accumulated over time, they have high property tax liabilities, even though their realized revenues are low. Therefore, most of their income is used to pay taxes. In areas with a speculative land appreciation (such as California in the 1970s and 2000s), there may be little to no relationship between property taxes and the ability of homeowners to pay them short of selling property.
This issue is a common argument used by supporters of measures such as California Proposition 13 or Oregon Ballot Measure 5; some economists have even called for the abolition of property taxes altogether, to be replaced by income taxes, consumption taxes such as European VAT, or a combination of both. Others, however, argue that property taxes are broadly progressive, since higher-income people disproportionately tend to have more valuable properties. In addition, while almost all households have income, nearly one-third of households have no real estate. In addition, the most valuable property is owned by non-individual companies. Therefore, property is more equitably distributed than income.
It has been argued that these two beliefs are not mutually contradictory - it is possible for a tax to become progressive in general but to be regressive in relation to minority groups. However, although not directly, and may not be one-to-one, the property tenant may be subject to property taxes as well. If the tax reduces the supply of housing units, it will increase the rental rates. In this way, the cost of the tax owner is passed on to the tenant (occupant).
Progressive policies
As the property increases in value, it is likely that a new buyer may be paying tax at an outdated value, thus putting an unfair burden on other property owners. To correct this imbalance, the municipality periodically revalues ​​the property. Revaluation yields the latest value to be used in determining the tax rate required to generate the required taxes.
The consequence of this is that existing owners are re-assessed as well as new owners and thus are required to pay property taxes whose value is determined by market forces, such as gentrification in low-income areas of a city. In an effort to lighten the tax burden often on existing owners, especially those with fixed income such as the elderly and those who are out of work, the community has introduced exceptions.
In some states, legislation imposes exceptions (usually called household exceptions) and/or limits on a percentage increase in taxes, which limits the increase in property taxes annually so that owners are not "taxed from their homes". Generally, these exceptions and ceilings are only available to property owners who use their properties as their primary residence. Homestead exclusions are generally not claimable on investment properties and second homes. When a homesteaded property changes ownership, property taxes often rise sharply and the sale price of a property can be the basis for new exceptions and limitations available to new owners.
Homestead exclusions increase the complexity of collecting property taxes and sometimes provide an easy opportunity for people with multiple properties to benefit from the tax credit they are not eligible for. Since there is no national database linking home ownership with Social Security numbers, landlords sometimes get a homestead tax credit by claiming several properties in different states, and even their own country, as their "primary residence", while only one property which really became their home.. In 2005, several US Senators and Congresses were known to have mistakenly claimed "second homes" in the Washington, D.C. larger as their "primary residence", giving them a property tax credit they are not entitled to.
Unemployed homestead exemption credits became so widespread in the state of Maryland that the law was enacted in the 2007 legislative session to require the validation of the primary residence status through the use of social security number matching systems. The bill was passed unanimously in Maryland House of Delegates and Senate and signed into law by the Governor. Justice in the collection and distribution of property taxes is a highly debated topic. Some people feel the school system will be more uniform if taxes are collected and distributed at the state level, thus equating school district funding. Others are reluctant to have higher levels of government in determining the level and allocation, preferring to hand the decision to the government level closer to the people.
In the effort of Rhode Island is being made to modify the revaluation practice to preserve the main benefits of property taxation, the reliability of tax revenues, while providing what some views as an unfair tax distribution correction weighs on existing property owners.
The Supreme Court has stated that Congress may directly impose a tax on land as long as taxes are shared among states based on representation/population. In a distributed land tax, each state will have its own tax rate sufficient to raise the pro rata portion of the total revenue to be financed by the land tax. So, for example, if State A has 5% of the population, State A will collect and transmit to the federal government such tax income equivalent to 5% of the earnings sought. Such huge taxes on land have been used on many occasions during the Civil War.
Indirect taxes on the transfer of land are allowed without sharing: in the past, this has taken the form of requiring stamps of income to be attached to deeds and mortgages, but this is no longer required by federal law. Under the Internal Revenue Code, the government realizes a substantial amount of income from income taxes on capital gains from the sale of land and in land taxes from the transfer of property (including land) on the death of its owner.
Milton Friedman notes that "property taxes are one of the most unfavorable taxes, because the tax is levied on something that can not be produced - the part that is levied on the ground". The 2008 analysis of the Organization for Economic Cooperation and Development is consistent with Friedman's opinion; examining the effects of different types of taxes on economic growth, it was found that property taxes "seem [ed] to be the most growth-friendly, followed by consumption taxes and then by personal income taxes." Allodial title Landrights.
References
External links
An overview guide is provided by several countries:
- Louisiana Property Tax The basics of Lafayette, Louisiana Office of Tax Appraisal
- Texas Property Tax Basics from Texas Public Account Supervisor
- New York Pamphlet How Tax Property Works
- The Illinois Property Tax System
Source of the article : Wikipedia
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