5 Common Factors That Affect The Amount Of Property Tax You Pay

Property taxes are one of the continuous costs of owning a home. They are generally real estate taxes that your local government calculates depending on the assessed value of your home and the municipality or county’s property tax rate. However, these taxes come with the caveat that they will fluctuate from year to year.

Many homeowners and buyers may be aware of their area’s property tax rates but, they may not be aware of the reasons that can cause it to rise. So, if you find yourself having to pay more in property taxes this year than you did the year before, one of these five causes could be to blame.


Most homeowners believe that home renovations will raise the value of their home. However, they may not be aware of the fact that any expansions or remodel work that increases the value of their home will also raise their property tax.

These can be changes to the interior or exterior of the home, such as a room expansion, renovating a kitchen or bathroom, converting your basement or attic to living space, or pool construction.

Other enhancements such as the addition of a garage or shed, or the modification of a fence, may result in a higher assessed value. It would be best if you sought assistance from a property tax consulting firm to see whether your planned upgrades are worth more than the potential tax liability.

2. Increase in Area Value & Changes In The Neighborhood

Home values are based on your property’s value as well as on the value of other homes in your community. So, if houses in your market are selling for more than the asking amount, it can increase the assessed value of your property.

Neighborhood improvements can also cause an area’s value to increase. These include the construction of luxury homes and the addition of amenities such as golf courses, parks, or lakes.

An increase in the value of your home is good news if you are ready to sell your home as you can walk off with a bigger profit. But if you are planning to stay in your home for long an increased assessment means an increase in your annual property tax bill.

3. Funding Educational Institutions

Property taxes are used to fund a variety of programs, including libraries, public schools, and road building. So, for example, if an existing educational institute in your region requests additional funds from the local government to continue operating or make improvements you can expect your property tax to get a boost.

Also, a new school in your area may lead to a higher government budget because administrators, teachers, and school workers would need to be employed, and grounds will need to be maintained. This will mean that a tax increase is on the way.

4. State and Local Budgeting

Some of the money raised by property taxes is used by the government to fund programs and essential services such as police and fire departments. When more money is needed to keep these services running, property taxes rise to help cover the costs. A city or county’s ability to raise taxes is usually limited, and increases that exceed the maximum frequently require voter approval.

Even if the local economy and real estate market is experiencing a slump, your property taxes are still subject to rises. Budget cuts are one of the major causes of this vexing issue.

5. Revaluation Of Properties

A revaluation is undertaken once every few years to bring all assessments in the town up to 100% of current market values. The State or the County Board of Taxation may require a revaluation, or the town may choose to perform one. A house assessment does not always imply that your taxes will increase. For example, your neighborhood may have a lot of new constructions, which might help to offset any tax increases.

What Can You Do If You Receive A Higher Tax Bill?

It is crucial to remember that while homeowners cannot challenge their property tax rate, they can dispute their home’s assessed value. For example, if a recent assessment of your property results in a higher property tax payment, and you disagree with the numbers, you can submit an appeal with your city. However, before filing an appeal, look into the prices of similar homes that have recently sold in the region. The value of homes in the region may have risen. Also, double-check that the assessment has accurate information regarding your home. If the city overstates your square footage or the number of bedrooms on your house, your property tax will be greater. Also, do not forget to check the timeframe for filing a dispute which is usually 30 to 90 days.

Another alternative is to determine whether you qualify for any property tax exemptions or credits, which may be based on the type of property you own, your age, your disability, or an act of service.

If you are ready to refinance your current home or buy a new one call our experts at (877) 877 7575 to start the process.