Most people don’t understand property taxes. Considering the tax code is 80,000 pages long, not including the local codes, it’s no surprise that it’s so hard to understand. Yet, failing to get some of the basics can lead to homeowners paying a lot more in tax.
Property taxes are typically determined by a combination of the tax rate for the county or town you live in, and the assessed value of your home. However, these are just the two main factors. Here are some of the things that can cause your property taxes to go up.
State and Local Budget Changes
When the state or city you live in has cuts to the funding they receive, it can cause your property taxes to go up. Since some of the revenue generated from property taxes funds the public schools, fire department, library and other services, the state has to find the money to keep these running. When funding is cut, they often turn to property taxes to make up the difference.
A New Amenity
If land near your home becomes something new, it could cause your property taxes to go up. Usually, if you buy a home on a golf course or near a lake, it will have higher property taxes than a home not so close to these amenities. You may also see a rise in property taxes if new construction comes into your area in the form of a new golf course or another amenity for the community.
An Increase in Public Employee Benefits
Property taxes are a huge part of the revenue source to pay for amenities when it comes to public employee benefits. If the benefits go up within your area, it’s likely your property taxes will also go up.
Changes Made to the Property
If you alter the property at all, it could cause your property taxes to go up. Adding living space, a deck, or a pool could mean your next tax bill will be higher than your last. Even renovations may cause higher property taxes, especially if those renovations increase the value of your home.
Local Projects
Sometimes, your property taxes will go up due to local projects, such as new sidewalks, curbs, stadiums, school improvements or anything else. When the local community needs to make improvements homeowners are often the ones helping to foot the bill.
There are several reasons why your property taxes may go up. These are just a few of the most common reasons you might see a larger tax bill than the last one. Keep an eye out for them.