One thing that both home buyers and sellers should keep squarely in mind is that the cost of a home goes far beyond the sale price. There is also, among other things, the property tax – which buyers need to factor in when determining how much house they can afford and sellers should consider when pricing. Understanding property taxes is important for both buyers and sellers. So check out this guide to understanding your property taxes in Princeton.
What Are Property Taxes . . . Really?
“Property taxes are,” as one authority puts it, “yearly taxes charged by the state and local governments (city and county) for each parcel of real estate within their borders. Typically, these taxes are governed by state laws, but assessed and collected by the county ad valorem (“according to value”). After a home has been officially appraised by the county, the property tax for that home is calculated by applying a certain tax rate to the value of the property.”
The amount of your property taxes in Princeton is typically determined primarily by the financial needs and the corresponding yearly budgetary constraints of the local government(s), which usually comprises city, county, and school districts. In addition, some states have state property taxes.
The purpose of property taxes is to provide the money needed to fund such services as:
- Public schools
- Emergency services
- Public transportation
- Parks and recreation
- Street landscaping and lighting
In addition, special circumstances and needs often result in the levy of additional property tax. “For example, direct assessments or bonds are flat fees property owners are required to pay following a city or district-wide vote to fund local services not covered or not covered in full by property tax revenues. And special assessments are often set up to establish long-term funding for municipal services such as parks, emergency services and schools that experience a strain on their resources due to an influx of people caused by the development of a new sub-division.”
How Are Property Taxes Determined?
Property taxes in Princeton and elsewhere depend on assessments that are conducted at varying times, but always in accordance with state laws and regulations. Basically, an assessor will take a look at your home and consider such aspects as location, size, condition, renovations, and value of similar properties.
“The assessor generally groups a community’s properties together based on similar characteristics and analyzes comparable sales of the properties to determine an average sales price for each group. Those individual characteristics of your home are still considered, however, which is why it is important to remember that just because you paid the same price for your home or have the same square footage as a friend or family member does not mean your assessed value will be the same—other factors like geographical location matter.”
Buyers who are interested in finding out about the property taxes on a prospective home have a couple of ways to find out. They can use one of the online property-tax calculators that use previously assessed value and then extrapolate from that. They can also go to the county courthouse and check the assessor’s records. And it never hurts to consult a local real estate agent.
What Can You Do If Your Princeton Property Taxes Are Too High?
Itis estimated that from 30% to 60% of properties in this country have been assessed too high, and this means that a lot of people are paying more in property taxes than they should. If you think this is your case – and are a seller who wants to make a sweeter deal for a buyer – you can appeal the assessed value of your home. You can’t challenge the property tax rate, but you can appeal the appraised/assessed value of your home. Often the erroneous assessment boils down to simple things like errors in square-footage calculations and renovations that didn’t ever come off.
Even if the assessment turns out to be correct, you still have ways to lower your property taxes in Princeton. There are, for example, programs offering tax deductions and exemptions for veterans, disabled people, and those who have agricultural land.
There always the old standby homestead exemption to help exempt a portion of your home’s value from taxation, And remember that paying property taxes early can get you a discount.
We all complain about taxes of any kind, but property taxes in Princeton do serve a valuable purpose, helping to provide basic, necessary services that we all need and enjoy. The whole thing can be more than a little confusing, though. But your local agent, who understands the nuances of local property taxes, can help make it clearer. And you do need to understand property taxes if you are preparing to buy or sell a home.