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Property taxes are local taxes. Local officials value
your property, set your tax rates, and collect your taxes. State law governs
how this process works. The property tax is an ad valorem tax. Ad valorem
is a Latin phrase which means according to value. The tax is based on
the value of the property. For example the property tax on land valued
at $10, 000 will be ten times higher than land valued at $1,000.
There are four main parts to the property tax system. The appraisal district
values property, administers exemptions, and maintains current ownership
information on the appraisal records. The appraisal review board is a
panel made up of people from the local community. They are independent
from the appraisal district. They settle any disagreements between the
appraisal district and the property owner about the valuation of the property.
The governing bodies of the taxing units, such as the city councils, school
boards, or county commissioners decide the annual budgets and set the
tax rates. This determines the total amount of taxes to be paid. The tax
office calculates the levy, mails the statements, collects the taxes and
distributes the tax revenue to the taxing units.
Property taxes are determined by what a property is used for on January
1, market conditions at the time and ownership of property on that date.
A tax lien attaches to property on January 1 to secure payment of taxes
for the year.
Property taxes are a major source of funding for local services. They
help pay for public schools, community health services, fire and police
protection, streets, roads, flood control projects, and many other services.
All property is taxable unless state or federal law
exempts all or part of the value. Total exemptions may be granted for
public properties or those owned by qualifying organizations such as churches,
schools, or charitable organizations. Homestead, over sixty-five, and
disabled veterans exemptions are examples of partial exemptions, which
reduce the taxable value on qualifying property.
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