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Property taxation relief: How it works and how to get it.

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In a Nutshell.

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This article was fact-checked by our editors and Rachel Weatherly, taxation product specialist with Credit Karma Tax.

Property taxes are a major source of income for local governments. But while they help finance key public services, property taxes can be a financial burden for many Americans.

On average, U.S. families spent 1,556 on property taxes nationally in fiscal year 2016, based on some 2019 Tax Foundation analysis — even though collection amounts vary by area.

While local governments generally manage property taxation, states typically have some supervision. When it comes to property tax relief, many countries have created programs aimed at easing property tax burdens on homeowners who qualify.

How do property taxes work?

Property taxes are usually based on where you live and the assessed value of your home. Local governments typically assess home values, establish tax rates, issue property tax bills and collect taxes under guidelines created by the state government.

A property assessor calculates home optima tax relief reviews values on a regular basis. In certain nations, assessment takes place annually, but the frequency can vary by state. Here’s the way the typical regional government might establish taxable home values.

An assessor will estimate a house ‘s market value, compare it to comparable properties, and maybe even check for signs of home and property developments. When the assessment is complete, the county or city plugs the home value into its property tax formula. It could take a percentage or dollar amount of the house ‘s assessed value and multiply that number by the tax rate, which is typically put at the county level.

Just how much are property taxes?

The quantity of property taxes varies heavily by area. For instance, Washington, D.C., taxpayers paid $3,535 per year on average in 2019, while Alabama taxpayers paid $548 in 2019, according to a Tax Foundation analysis.

The Tax Foundation points out that property taxes help pay for public services, which can make a place more desirable and even increase residential market values. Assessed values generally move in tandem with market values — and a higher assessed value typically means a higher tax bill.

But taxation group practices also differ by state. To keep this bill from ballooning year to year, some countries take steps to curb property taxes. For instance, they may restrict how much a tax bill can increase or implement a typical homestead exemption, which automatically reduces a house ‘s assessed value.

How can homeowners pay property taxes?

There are two chief strategies to pay property taxes. If you’ve got a mortgage, your lender can wrap your property tax payment into your monthly payment, then pay the bill on your own behalf when it’s due. But if you have a home and don’t have any mortgage, then you pay property taxes directly to your regional government.

What’s property tax relief?

Property tax relief plans, sometimes called exemptions, launch eligible homeowners from paying part or all of their property tax obligation. Just how long the exemption lasts can change based on where you live, and the reason why you ‘re applying for the exemption.

The tax-relief process varies with each county and state, and potentially every city. Generally, you will need to meet certain eligibility requirements, submit an application and supply documents that support your petition. Some frequent property tax exemptions decrease or waive property taxes for…

Veterans Surviving spouses Minor children whose parents are dead Homeowners who lately produced energy-efficient home developments Blind, elderly, handicapped or low-income taxpayers.

You might need to submit a fresh application each year, though some regional governments have extended application deadlines for the 2020 tax season.

How do I apply for property tax relief?

Depending on the county or state, there are a few methods to apply for property tax relief: online, by email or at your regional tax office. Some countries also have call centers to reply property owners’ questions. But guidelines change, so check your city, state or county ‘s site for advice before you apply.

The application process can vary by jurisdiction, but here’s an illustration of how it may work.

1. Get an application and inspect the requirements. Local governments often create the application and instructions available on their websites. Go through the eligibility conditions carefully to see whether you are eligible for property tax relief.

2. Complete the application and collect your documentation. The documents you need may differ, based on the program guidelines and type of exemption you’re searching for.

3. Document the application by the deadline. After you submit the application, inquire about next steps and when you may receive a response.

Property tax relief advice for certain countries.

To learn about property tax relief in certain nations, take a look at these Credit Karma Tax posts.

Bottom line.

Property tax relief is intended to do precisely that: ease taxpayers from the burden of large property taxes. The best method to learn about what property tax aid may be available to you is to visit your city, state and county websites for information on programs and eligibility conditions.

How has COVID-19 affected property tax relief?

Together with the spread of the coronavirus, many individuals have lost a trusted source of income and are struggling financially. Some states and counties are taking measures to relieve the property tax burden during a stressful moment. Depending on the state or city, these steps could include extended deadlines, waived fees and punishment cancellations.

Extended deadline.

Throughout the coronavirus pandemic, some states and cities have long property tax deadlines or left the decision to respective counties.

Local governments may also opt to waive penalties and fees, that are typically added to overdue or delinquent payments.

Penalty cancellation.

In certain states, residents impacted by COVID-19 could be able to apply for a penalty cancellation or establish a payment plan for their overdue tax bills.

Check your neighborhood ‘s site for more information. Depending on where you live, you may not be able to request a penalty cancellation until after the official tax deadline has passed. Should you ask for a penalty cancellation, then be prepared to describe how you’ve been impacted by the coronavirus and also to show documentation.

Rachel Weatherly is a tax product specialist using Credit Karma Tax. She studied finance and accounting at Western Carolina University and also has worked as a tax analyst.

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