A Simple View of the Property Tax Works
(okay, so there is no simple way to explain it, but I'll try)

How is my tax bill determined?

	1st step	Your local County Assessor will determine an "assessed value" for your property.  They review the value at least every four years (some counties update values every year).  They will advise you of their valuation estimate and you have a variety of remedies if you believe a mistake was made.  Contact your local assessor for more information about this.
	2nd step	The local entities (city, county, special districts) set "tax levies".  These levies will be multiplied by the value of the property (divided by $1,000 - you will hear the term "levy rate per $1,000 of assessed value). The setting of the levies will determine the amount of your tax and is a very important policy decision by the taxing entities.  There are a variety of limitations in the constitution and in state law.  State law requires public hearings which will be publicized in the newspapers.
	3rd step	The County Assessor will compute the tax due from each taxpayer.  This is a daunting task.  It determines what your bill is compared to your neighbors and compared to that new mega-mall across town.  We will spend more time on this below.

How is my tax bill determined?

Value of the property (divided by $1,000)	Times the Levy Rate	Equals total tax bill for property
Sample: $150,000 home divided by $1,000 equals 150	Times levy rate of $13.00 per $1,000	Equals tax bill of $1,950

Property values change  - the levy rates change  -  so, the picture above is constantly changing.

Another example:

Important notes: Even if the tax bill does not go up, the shares paid can change.  For instance if the house above goes up in value by 10% to $165,000 but the business property does not go up in value (it stays at $15,000,000).  The cities, county and others have decided to raise taxes by 2% (not too bad wouldn't you think?)  But! since your house went up more than the rate of the increase, your taxes will go up from both the increase in the value and the increase in the taxes collected ( whopping 12% increase).  Since the business property is only dealing with an increase in the taxes collected and now represents a smaller part of the ratio compared to all tax payers, their bill only goes up less than 1%!  So, the change in taxes is driven by your property value, your tax rate and your neighbors property values as well!

Who gets my property tax?

More information about property taxes

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