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Simply put, property taxes are government taxes assessed by local authorities on your home and the land that it sits upon. These taxes may sometimes be known as real estate taxes. Cities, counties and states can levy them. Normally it is only the counties that do this, but all three are possible.Establishing a mileage rate generally derives the tax, which is then applied to the perceived value of the land and the home. The tax money is frequently used by the collecting entity as a method of providing services to the property owner in the way of police, fire, school and other services.

Paying property taxes is normally done in two ways. The first would be to include them into your monthly payment to the mortgage company handling the loan. The mortgage company would then pay the tax bill to the collection entity when it becomes due. Normally that is a once a year proposition. The second method would be for you to pay them directly. Many land/homeowners who have paid off their property pay this way. This blog can be a good source of information if you’re confused.

Another important consideration is that if your local assessor overvalues your home, you have the right to protest property tax assessments in most counties.

It is very important that you keep up with your property taxes as they can get you in trouble if you do not. These taxes are not unlike owing the Federal Government taxes of any kind. They do not go away! If you become delinquent in your property taxes, they will simply put a lien against your property. As with all government entities, they will get their due, sooner or later.

The ‘later’ in this situation is when you sell the property. At the time of sale, they simply exercise the lien and it is normally done prior to the mortgage company getting their money. So in a situation where the property may have lost value to a changing market – such as right now – they would not get full value on the property. To alleviate that situation, many mortgage companies when notified of a lien, will pay it off and bill you then and there to get it done.

The good news is that all taxes related to your property are tax deductible. As a rule so is the interest on the loan used to purchase the land/property.