How is real property tax imposed?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 15, 2021

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Many counties impose a real property tax on the ownership of real estate located within their boundaries. Real property tax is typically imposed upon the assessed value of the real property and typically set as a percentage of the most recent purchase price paid for a parcel of real property. In addition, many counties impose a one time tax or fee whenever a parcel of real property is transferred. Real property taxes are imposed and collected at the local level.

How are Property Taxes Assessed?

Property taxes are assessed differently in each county, but there are generally two ways that a county assesses property taxes. The first technique used is a standard property tax. This technique requires the county to appraise the value of your property and charge you the tax based on the appraised value. The other type, known as a special tax, uses the proposed value of the property to the community and adjusts the tax accordingly. For instance, under a standard property tax system, you may owe $3,000 in property taxes because of your home’s value. However, because your home does not offer much value to the community, you may pay $4,000 if the special tax rules are applied.

Property tax rates are most commonly calculated using a percentage system. Most counties use this method to avoid complaints that they are using unfair taxing practices. So, for example, if your home is worth $200,000 and the county decided to collect a 2% property tax, you would owe $4,000 in property taxes.

Options for Paying Property Taxes

Property taxes are not always paid directly by the homeowner. Some banks will utilize a special holding account for the mortgage payer and add a small amount to your annual mortgage to cover your yearly property taxes. In this scenario, you will typically only notice a difference in expenses when the property tax for your area is increased.

Getting Help

If you have questions or concerns about real property taxes, you should contact a tax attorney in your area for help.

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