Homeownership is one of life’s great highlights, but ask homeowners about paying property tax and they will tell you it is their least favorite responsibility. However, then though no one wants to pay them they are vital for funding schools, libraries, police departments, fire departments, and public works like roads and parks.
Savvy homeowners and prudent buyers are probably aware of the property tax rates in their area, but they may not understand the factors that can drive their property tax rates up. So when tax season rolls around, if you find yourself having to shell out more than you did last year, one of these five reasons might be to blame.
Home Improvements
Renovating a bathroom or kitchen can revitalize a home and add to its worth, but it is also the most common reason why your property taxes rise. Improving your home makes it more valuable and that, in turn, increases your property taxes.
Revaluation
Communities and counties periodically reevaluate properties. During these times, government officials or hired appraisers review all properties to figure out its current assessed value. Revaluations are needed to make sure that the tax burden is spread equitable and accurately among the area’s homeowners.
Nearby Home Sales
If your neighbors sell their homes for more than the asking price, your property taxes may rise. Home sales affect what other houses in a neighborhood are worth. While that’s great for your property’s value when you decide to sell, it means a higher tax bill in the meantime.
New Schools
Building a new school is great for student and teachers, and for the community overall. However, it will come with a hefty price tag that is likely to entail higher property taxes. There are actually two reasons as to why property taxes can increase after the construction of new schools:
- Communities and counties often increase taxes to help pay for school projects
- A new school will bring new families to town, which will make your community a more desirable location. The hotter market and the greater competition for homes are likely to lead to bidding wars and higher property values.
Higher Government Budgets
One of the main reasons on which cities and counties draw to fund their budgets is the property tax. If government employees are owed a raise, or other budgetary needs increase, the residents’ taxes may need to be increased to help foot the bill.
