Property Taxes

How do property taxes work?
Property taxes are what most homeowners in the United States pay for the privilege of owning a piece of real estate, on average 1.5 percent of the property's current market value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of formulas.

Are property taxes deductible?
Property taxes on all real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.

What is an escrow account?
An escrow account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners hazard insurance premiums as they are received each month.

Do all loans require escrow accounts?
If you are taking out a FHA or VA loan, the lender can require an escrow account to pay real estate taxes and  homeowners hazard insurance premiums, as with a standard loan. Some conventional loans do not require an escrow account.

Where can I learn more about appealing my property taxes?
Contact your local tax assessor's office to see what procedures to follow to appeal your property tax assessment. You may be able to appeal your assessment informally.  Mostly likely, however, you will have to go through a formal tax-appeal processes, which begin with an appeal filed with the appropriate assessment appeals board.