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Property taxes are a significant annual expense every homeowner faces, even after paying off the mortgage. Local authorities set guidelines to determine property taxes, and those guidelines can vary widely among regions. But there are some general points to understand when assessing your property taxes.

The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.

Property assessments are conducted annually, or every other year, or when the property is transferred. The assessed value is either the market value or the market value multiplied by an assessment rate.

Exemptions may include a decrease in your property’s assessed value if you’re an owner-occupant. The decrease does not reflect the property’s market value, but it will lower the taxes.

Your property’s use is another consideration. It could be used for residential, office, commercial, farm or other purposes. Property used for religious or spiritual purposes may be tax-exempt.

The property tax rate is a percentage by which the assessed value of your property is multiplied to determine your tax bill.

Property taxes pay for schools, libraries, parks, police and fire protection, mosquito control, and many other services. Each service has its own rate that’s multiplied by a property’s assessed value and then added together to determine a final property tax bill.

The tax multiplier should be the same for all properties within a specific category. But if property taxes are based on current real estate values, there will be differences from year to year. Tax authorities change tax bills by increasing or decreasing a property’s assessed value or its tax rate.

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