Property Tax

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Definition of 'Property Tax'

Property tax is a type of tax that is levied on real estate. It is typically assessed by local governments and is based on the value of the property. Property taxes can be used to fund a variety of public services, such as schools, roads, and police departments.

There are a few different ways to calculate property taxes. The most common method is the assessed value method. Under this method, the government assesses the value of the property and then taxes it at a certain rate. The rate can vary depending on the location of the property and the type of property.

Another method of calculating property taxes is the millage rate method. Under this method, the government sets a millage rate, which is a percentage of the assessed value of the property. The property owner then pays taxes based on the millage rate and the assessed value of their property.

Property taxes can be a significant expense for homeowners. However, they are an important source of revenue for local governments. Property taxes help to fund essential public services and can make a community more livable.

Here are some additional things to know about property taxes:

* Property taxes are typically paid annually. However, some jurisdictions may require taxes to be paid quarterly or monthly.
* Property taxes can be paid in a lump sum or in installments.
* Property taxes can be deducted from federal income taxes. However, the amount of the deduction is limited.
* Property taxes can be appealed if the property owner believes that the assessed value of their property is too high.

If you are a homeowner, it is important to understand how property taxes work. By understanding the basics of property taxes, you can be prepared for the annual tax bill and can make sure that you are paying the correct amount of taxes.

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