Friday, July 31, 2009

Property Tax Rates - What it Means to You

Property Tax Rates are complicated this year and next with the tax cap limits that are working into the final tax bills. For residential homestead use, where you live in the home you pay property taxes on, the cap for pay-2009 is 1.5% of the assessed value.

The bill will show your total assessed value, then subtract deductions and credits for a net assessed value. The net assessed value times your tax rate percentage is the property tax you owe -- only if that number is less than your total assessed value before deductions and credits times 1.5 percent.

For example, if your house has an assessed value of $100,000 and a net assessed value after deductions and credits of $50,000, and you live in Decatur Township with a tax rate of 7.0354, your property taxes would be $3652.70 before the cap and $1,500 after the cap. So, this theoretical house would be charged $1,500 in property taxes. The same house in Lawrence Township which has a tax rate of 2.7210, would be $1360.50 before the cap, and $1,500 after the cap. This theoretical house would be charged $1360.50 in property taxes because it is below the cap.

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