Property Taxes: The Basics and Veteran Exemptions
When you decide to purchase a home, you take on the responsibility of paying property taxes to your town, city, or county. Property taxes are based on the assessed value of your home. Assessed value is different from appraised value. Assessments are done to give a dollar-value to homes for tax purposes, and tend to be lower than the appraised value, which is the market value of a home at any given time.
In many states, property taxes are measured by "mils" - one mil is $1 for every $1,000 of value in a home. A $100,000 house with a 4.8 mil property tax would pay $4.80 for every $1,000 in value, or $480. In other states, the amount of property tax paid is determined by the town budget - the amount needed is divided by the total value of the residential and commercial property and calculated by the amount owed per thousand dollars in the property.
Regardless of how property taxes are computed, when you own a home, you owe them. If you have a mortgage then the lender may require that you pay property taxes each month as part of your mortgage payment. Otherwise, your town bills you every 3-6 months and the taxes are due in full on the due date.
Veterans, however, can get a reduction on property taxes under certain circumstances. While not every town or city participates, in many cases veterans can get a break on property taxes. New York has a number of property tax exemptions for veterans while Massachusetts has a town-by-town property tax reduction program as well.
Other states offer active duty military members property tax exemptions during the service member's time of active duty. Oregon offers members of the military a significant reduction in property taxes for soldiers who qualify and the state of Michigan offers active duty military a similar break.
To learn whether your town or city offers property tax exemptions to veterans, do an Internet search for - [your town] veteran property tax exemption or [your state] property tax exemption active duty - to learn more.
