Real estate taxes vs. property taxes are commonly confused, but they are not identical. Both refer to taxes linked to real property, but local governments calculate, assess, and use them differently. It’s crucial for homeowners and buyers to understand these disparities and make informed financial decisions.
At NJLUX Real Estate, we recognize that navigating this real estate terminology can be challenging. In this article, we will outline the significant differences between real estate taxes and property taxes.
What Are Real Estate Taxes?
Real estate taxes, also referred to as property taxes, are a form of taxes imposed by local governments on the assessed value of real estate properties. These taxes are utilized to support a variety of public services, such as schools, fire and police departments, road maintenance, and other local government services.
The assessed value of the property is typically determined by a local government assessor’s office, and the amount of tax owed is based on the property’s assessed value. The tax rate, which varies depending on the location and local tax regulations, is generally expressed as a percentage of the assessed value. Unlike income taxes, real estate taxes are not based on the income of the property owner but rather on the value of the property they possess.
What Are Property Taxes?
Every year, property owners must pay their dues to the local government in the form of property taxes. These taxes are used to fund an array of community services, including public safety, road maintenance, and schools. How much do you owe? That depends on the assessed value of your property and the local tax rate.
A local government tax assessor calculates the property’s market value and adjusts it for any state or municipality-allowed deductions or exemptions. So, where do you stand? The amount you pay can vary greatly based on where your property is located and the local tax rates, so it’s best to consult with a real estate agent to know exactly how much you’re about to pay as property taxes.
The Differences Between Real Estate and Property Taxes
Real estate and property taxes are two different types of taxes that homeowners should be aware of. Real estate taxes, also known as property taxes, are taxes assessed on real property, such as land and buildings. The amount of real estate taxes is typically based on the assessed value of the property and is used to fund local government services and infrastructure.
On the other hand, property taxes refer to taxes that are assessed on personal property, such as vehicles, boats, and equipment. These taxes are typically assessed annually based on the value of the property and are used to fund local government services as well.
We, at NJLUX Real Estate, have established a strong reputation for excellence in the industry. With over 20 years of experience, we have a proven track record of delivering exceptional service and results to our clients.
Our team is composed of highly skilled professionals who are dedicated to providing personalized attention and expert guidance throughout the entire real estate process. Give us a call today and let’s talk about your next real estate project.