Does everyone understand property tax calculations?
For example, what would be the property tax for a property with an estimated market value of $150,000 (assessor's or tax district's estimation), an assessment ratio of 75%, and the following millage rates: 10 mills for County, 5 mills for library, 25 mills for school district, and 20 mills for the municipality. Also, the owner of this property qualifies for a $6,000 homestead exemption.
What is the assessed value?
What are the property taxes?
What is the value (tax savings) of the homestead exemption?
Comment to this post if you would like to take a shot at this.
Tuesday, February 26, 2008
Property Tax Calculation
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2 comments:
Let's the assessed value would be:
$112,500
The property taxes would be
County 10 mills
$1,065
Libary 5 mills
$532.50
School
$2,622.50
Municipality
$2,130.00
The value (tax savings from the homestead exemption would be:
$360
Wo, Looks good!
Yes, the assessed value is $112,500 ($150,000 x. 75). However, we get to shelter $6,000 of this assessed value (not pay taxes on $6,0000 of the $112,500 due to the homestead exemption). So for calculating taxes, we will use $106,500 ($112,500 less $6,000).
You broke it down nicely, but I will just use the total of 60 mills. 1 mill is 1/1000 (just like 1% is 1/100). So in decimal format, 60 mills equals .060 (60/1000 just like 60% is .60).
The calculation is $106,500 x .060 = $6,390. The total property tax is $6,390.
As for the value of the homestead exemption, multiple $6,000 x 60 mills or .060 = $360. The $6,000 homestead exemption saved the tax paper $360 in property tax. You got the correct too!
Homestead exemptions are common in taxing jurisdiction where they want to promote homeownership. You typically qualify for a homestead exemption if your property is your primary residence (i.e., not an investment property). Other exemptions like this might be available to senior citizens, blind, or disabled (it is upto the county or tax jurisdiction).
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