Separating Fact from Fiction 16 Common Property Tax Myths Debunked

“Nothing is certain except death and taxes.” – Benjamin Franklin.

While property taxes are inevitable, their complexities often confuse homeowners. Knowing the difference between true and false could lead to significant financial savings and if nothing else, a better understanding of your property taxes. Let’s separate fact from fiction by debunking common property tax myths!

1. Myth: Property taxes are only based on the assessed value of a home.

Reality: While the assessed value is a major consideration, other factors like property type, location, and exemptions also influence property taxes.

2. Myth: Property taxes are based on the age of a home.

Reality: While older homes may have lower assessed values, other factors like size, condition, and location play more significant roles.

3. Myth: The assessed value of a property is the same as fair market value.

Reality: The assessed value of a home is established by a government assessor for taxation purposes. This may or may not accurately reflect its fair market value, meaning the amount the property could be sold for in today’s market conditions.

4. Myth: Professional-grade property assessments are expensive.

Reality: You can get immediate access to your FREE custom homeowner valuation in under 2 minutes with the TrueValueIndex® by DomiDocs®.

5. Myth: Only homeowners need to pay property taxes.

Reality: If you own any property, including commercial buildings or vacant land, you’ll be subject to property taxes.

6. Myth: Property taxes are the same across all municipalities.

Reality: Property tax rates vary widely between municipalities, even within the same state.

7. Myth: Property taxes remain the same if the property value doesn’t increase.

Reality: Local governments adjust property tax rates annually to fund essential services, which can affect your property tax bill.

8. Myth: Property taxes are subject to a maximum 10% increase.

Reality: Homesteaded properties are indeed capped with a 10% property tax increase. But if you just purchased a homesteaded property, you must submit a new homestead application under your name before any tax cap exemption takes effect.

9. Myth: Property taxes can double after purchasing a home.

Reality: When buying a home, annual property taxes are often prorated between the buyer and seller. As the new property owner, you’ll owe the full amount when the next taxation year comes around.

10. Myth: Remodelling always increases property taxes.

Reality: While some major renovations can increase the value of your home, smaller projects won’t make a dent and others, such as energy-efficient improvements, could potentially decrease property taxes.

11. Myth: You can’t lower your property taxes.

Reality: Strategies to lower your property taxes can include appealing the assessment, maintaining your property well, and taking advantage of available exemptions.

12. Myth: Property taxes only pay for public schools

Reality: Besides schools, community beneficiaries of monies funded by municipal property taxes include police and fire departments, park districts, and libraries.

13. Myth: Property taxes are determined by assessors.

Reality: Property tax rates are established by municipalities, and include governing authorities like county legislatures, school boards, village boards, and town boards.

14. Myth: Property taxes are determined by your home’s value.

Reality: Property taxes are not solely based on your home’s value. Local governments establish property tax rates to meet their budget needs, so even if your home’s value remains the same, your taxes could increase due to a local tax hike.

15. Myth: Property tax assessments can’t be appealed.

Reality: All homeowners are entitled to file a property tax appeal if they feel their assessment is too high. Once your property tax bill is issued, it’s too late to appeal the assessment.

16. Myth: If you own your home outright, you don’t have to pay property taxes.

Reality: Benjamin Franklin knew best. Even if your property is paid in full, you’re still subject to annual property taxes.

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