What Is Property Tax?

What Is Property Tax?

Taxes can be a confusing topic that leaves individuals feeling frustrated and overwhelmed, but at Care Financial, we want to ease your stress. When it comes to taxes, our financial services are here to leave you feeling both informed and confident in handling your own taxes with ease. Some topics surrounding taxes can be initially confusing, however, especially when it comes to property taxes. If you find yourself wondering what the purpose is of a property tax, why it is something you need to pay, who pays property taxes or any number of questions surrounding this topic, we are happily here to educate.

What is Property Tax?

Property taxes are the taxes on real estate owned by either an individual or a corporation. Many jurisdictions also tax personal property, such as cars or boats. Whether or not the personal property tax applies to you depends on where you live. Property taxes help pay for services on the local level, such as libraries, schools, safety, sanitation and more. While dealing with property taxes we understand it’s not the most pleasing task, but it is important to remember that they help fund these local services that we are so grateful for. 

Who Pays Property Tax?

Property taxes are paid by the owner of a home or property and are often paid separately from the home’s mortgage rate. The due date of these taxes varies between each state. The average rate a homeowner can expect to pay is 2.16 percent, but this rate depends on a wide range of factors. Property taxes are typically due at closing, and you might have to pay several thousand dollars to cover both property taxes and closing costs. When buying a house, you should be aware of these factors and plan accordingly. 

What Determines the Property Tax

In Alabama, your property taxes are determined by a number of different factors, including your property’s assessed values. These assessors take into account the average home or property value, environmental factors such as weather, location and tourism, and the local business climate. They also assess the tax based on where or not there is access to public services and if the land assessed is vacant or not. All of these factors can affect the amount of tax a homeowner can expect to pay on their home. 

If you find that dealing with taxes, mortgage rates or any other financial issues are beginning to overwhelm you, Care Financial is here to help. Our financial planning services allow us to create a financial plan that allows businesses and families to work with a financial advisor to create a plan and achieve financial goals and objectives in areas like taxes, retirement, investing and more. If this sounds like something you could benefit from, we would love to hear from you at 251-633-7122 for services in Alabama and Mississippi today!