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.
Jurisdictions in all 50 states and the District of Columbia impose property taxes, which provide local and some state jurisdictions with a stable and reliable source of revenue. Most property tax revenue comes from levies on real property (land and improvements to land) but states often tax personal property (such as noncommercial motor vehicles) as well. The tax equals a percentage (the tax rate) of the assessed value of the property and may be levied in some form at every level of government— state, county, municipal, township, school district, and special district. In 2006, states and localities collected $359 billion, nearly 97 percent at the local level.
