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Real Property Taxes

Real Property Taxes Assessment

 Real Property Taxes Assessment

The real property tax rate is based and subsequently calculated on the value of real property. Real property in this context refers to land, or anything built on the land that cannot be moved or separated. Counties, cities, towns, and school districts each raise money through the real property tax; money received from this tax helps fund and maintain: education, law enforcement agencies, roads, and municipal projects. In order to determine the value of real property, and the annual real property tax rate, the land in question must be assessed or examined thoroughly.
A property assessment aims to determine the real value of land. Also known as the market value, the property or home in question is evaluated based on a steady pricing model. The evaluations, or assessments are conducted by an appointed official known as the assessor.
 An assessor independently evaluates the value of real property and are employed by the town, county, or state. Assessments are not to be confused with appraisals; an assessment determines the value of property to calculate an annual tax rate, while an appraisal predicts the value of the house for selling purposes or mortgage rates.
The assessment accurately estimates the market value of real property by comparing the sales prices of similar properties within the same community. The assessor will arrive at the property, often alone, and inspect the land for specific factors or characteristics that add or diminish value. Common characteristics that diminish the value of a property are:close to a busy road or stoplight, on a small piece of property or a congested land, the surrounding neighborhood is run down, the foundation or structure is dilapidated or unkempt, the material used to make the home is cheap, the house is close to the street, or the property does not contain a suitable driveway. 
Common characteristics that increase the value of the property are: the house is located in a quiet neighborhood, the homes around the property are maintained, the material used to build the home is expensive or sturdy, the land is manicured and the driveway is freshly paved, the garage is not dilapidated, and the property is large and on a side street or cul-de-sac.  There are literally hundreds of factors that go into the assessment process of real property; each of which can greatly increase or diminish the value of one’s home or land. 
The relationship between real property taxes and assessment value are directly proportional. A higher assessment value on a property will enforce a higher real property tax on the land owner. The amount of tax levied is a percentage of the assessment value. The assessor will have a checklist of things to look for, and there will be a steady physical investigation of the home and surrounding property during the procedure.
The county, town, or jurisdiction is responsible for listing and valuing all property within the specific jurisdiction. The assessment process must follow varying state laws, and the overall goal of the procedure is to establish fair and equal property values in the area. The equalization of property values will enforce the state or jurisdiction to levy fair and equitable taxes between property owners.

Property Tax Avoidance and Evasion Methods

Property Tax Avoidance and Evasion Methods

Real property taxes are the largest source of revenue for local and state governments. Tax evasion in regards to the ad valorem tax is very difficult and can lead to felony charges. Tax avoidance techniques tend not work for property taxes; an individual who refuses to pay their property taxes will have their land stripped by the government. 
Owning land is similar to living in an apartment, where the government acts as the landlord, and the property taxes are the rent. Property taxes enforce an individual to pay for the right to live on a piece of land. Tax avoidance techniques are nonexistent for property taxes, but there are numerous steps an individual can take to decrease the amount he or she pays.
The most obvious step taken to decrease the amount one owns, is simply to purchase less land or make little improvements on the land. Granted these methods are undesirable, but property taxes can greatly increase through substantial improvements. Like in real estate, location is everything when it comes to property taxes. Areas with strong public schools or a wealthy demographic tend to levy higher property taxes than working class or marginal locations. 
A small home in a wealthy community will undoubtedly have a higher property tax rate than a larger home in a more desolate or undeveloped area. Owning land in a specific area is an individuals right, if they wish to live somewhere with high property taxes they are free to do so. That being said, there are techniques to lower one’s property taxes, but no practical strategy to take part in tax evasion. 
Techniques to lower property taxes:

         When your property is being assessed look for errors in the description of your physical property. In the official assessment your property will be examined fully, square footage, boundaries, the condition of the physical property the number of bedrooms in your home; all of these factors strongly effect the amount of property taxes you will pay. Errors happen during the assessment process, correcting mistakes is not a form of tax evasion, but instead a wise move to lower your property taxes. 
When your property value is assessed compare it with other pieces of property in your area. If your assessment is considerably higher than your neighbors, a case questioning the assessment may be justified. Property’s often get marked up, or deemed more valuable than they actually are. If homes which are similar in terms of size and marketability, are appraised at lower levels take your assessment to your local property tax assessor and have it reviewed. A detailed examination of all components is necessary when comparing assessments. What are the similarities and differences of your property vs. your neighbors? Are their differences in location, traffic, floor plans, materials used to build the home?  Again, this is not tax avoidance, but a common maneuver taken by astute homeowners.
         Photograph your property and other property’s in your area. Photographs offer physical evidence that can detail evidence or similarities between your property and others with lower assessed values. Look at the physical conditions of the exterior and foundations of the home, as well as the surrounding areas. Physical differences in these characteristics will yield varying property values. Tax evasion is not permissible for property taxes, but offering photographs to your property tax assessor can lower your assessed value.
Tax evasion is a fruitless effort in regards to property taxes. There is no way to avoid them. The government relies on such funds for public funding, schooling, and services. The steps listed above can help decrease your assessed value and thus lower the amount paid. When the evidence is compiled, and the investigation is concluded present the case to your local property tax assessor or your local governments review board for determining taxes. 
Similar properties, in theory, should have equal or fair assessments. Do not attempt to commit tax avoidance or tax evasion, but instead, follow the above steps to lower your property tax payments.

A Brief Guide to Real Property Tax

A Brief Guide to Real Property Tax

The real property tax is a major source of revenue for local and state governments. Monies collected from such taxes offer local jurisdictions a major source of funding for schools, roads, public safety, and other public services. Real property tax is highly elastic however; the amount of tax levied greatly fluctuates with changes in the housing market, and national economy. If the market is booming, property taxes can swell, which puts a financial strain on a landowner. 
Concern over rising property taxes and the sensitivity they possess towards changes in the economy, has sparked a number of states to impose some form of limit on the amount of property tax that can be levied. These limits, or tax caps, puts a ceiling on the amount of property tax a municipality, county, or school district can collect.
The first form of tax cap occurred in California in 1978. As land and home prices skyrocketed, property owners were forced to pay a proportionate increase on property taxes. Many individuals in California couldn’t afford such a steep increase in property tax, which in turn, created a financial burden for the tax payer. Landowners and homeowners revolted and refused to pay the obscene taxes. The state government viewed the increase as unrealistic and instituted proposition 13, which capped the increase of annual property taxes.
   
The tax cap on property taxes ensures a land owner that their taxes will never reach an exorbitant rate. A landowner is guaranteed that his property tax will stay within a given range, and not exceed percentages beyond the tax cap. To simplify real property tax, the percentage owed is calculated by multiplying the local property tax rate with the assessed value of the individuals property. Different types of tax caps focus on limiting the two variables of this equation. 
“Rate caps,” for example limit the property tax rate itself, and place a ceiling on the percentage levied. Another form of tax cap, the “assessment cap,” limits the yearly increase in the assessed value of an individuals property. “Total levy caps” the most restrictive form of tax cap, places a limit on the annual increase in a locality’s total revenue gained through property taxes. Each form of tax cap restricts the various proponents to the real property tax equation. 
The rate cap limits the real property tax rate itself, the assessment cap restricts the locality’s ability to increase the assessed value of the home, and the total levy cap places a limit on the end product of the equation, or the total revenue gained through property taxes.
Besides from limiting the amount of property tax a landowner pays, many believe that a tax cap offers a community positive externalities that cannot be weighed or viewed by numbers or equations. For instance, proponents of the tax cap feel as though it forces the community to be cost efficient with their revenues. Without a tax cap, a locality can increase revenues fairly easily. With an excess of money there is no need to be frugal or wise in regards to funding public services. A tax cap limits the localities revenue and thus forces it to use it’s limited money wisely when offering its public services. In addition to controlling a budget, a tax cap also increases a land owner’s disposable income.
Through decreased or limited property payments, a landowner will have an excess of money, enabling he/she to consume more goods or services. Like individuals, a property tax cap can positively effect small businesses or corporations. Businesses operate on land owned by the state governments, making them susceptible to increased rates well. 
When the property tax rises to obscene rates, businesses may be forced to cut costs in the form of limiting production or firing employees. Unemployment or limited production can pose catastrophic macro-economic effects on a community. To restrict these occurrences, a property tax cap will effectively limit the costs a small business or corporation will incur through property tax.
The tax cap is a balancing act of sorts. It was created to ease the strain on taxpayers, while maintaining a stable level of revenue for a community to offer public services. Many communities have experienced a disproportionate relationship between a tax cap placed on property taxes. State’s like California or Massachusetts have been forced to shut down schools, and lay off municipal employees due to a lack of funding from a state wide tax cap. 
The stringent tax caps that these state’s instituted have provided relief for land owners, but have also limited a localities main source of revenue. The relationship between property taxes and tax caps is extremely sensitive. A community must find an equilibrium, or a sustainable balancing percentage for the individual land owner and the community to live in harmony.

The Effects of Real Property Taxes

The Effects of Real Property Taxes

The property tax cap has a direct effect on a localities budget, and their subsequent ability to provide public services. Property tax caps are a balancing act between the individual land owner and the community itself. Given a stable budget, if property taxes are too high the locality or community will increase their revenue and have a surplus of cash. 
Although the community thrives, the individual landowner will suffer financially from increased real property taxes. If the equation was reversed, and property taxes were capped or limited, the individual land owner will benefit by increasing his/her disposable income, and the locality will suffer due to a loss of revenue. In order to provide public services such as schools, law enforcement, or municipal services a community needs to tax its citizens. 
The majority of revenue that a locality operates with is established through administering property taxes. Property tax caps limit the amount a locality can tax land, which in turn, limits the amount of revenue a community can operate under.
Property tax caps direct the flow of cash between landowner and community. The importance between the flow of cash between landowner and community is exemplified through the availability or effectiveness of public services. Public services, or goods like roads, schools, and law enforcement offered by the community are necessary to sustain a healthy society. These public services are funded through a variety of local taxes, but the majority of revenue comes from real property tax. 
If a property tax cap is present in the community or state, the localities revenue is limited and they must budget accordingly in regards to providing public services. Property tax caps require a community to be frugal with their spending. The property tax cap effects all services, including salaries for local government employees, such as teachers, firemen, or police officers. The salaries for these employees increase every year due to numerous economic factors, the most important of which being inflation.
Subsequently, costs also rise for equipment or manpower needed to build or maintain roads, highways, and parks. As costs and salaries both rise there is more stress put on property taxes and their caps. Salaries between jurisdictions must remain competitive, but are effected by property tax caps and the amount of property tax levied on landowners.
The property tax cap’s largest effect on a community revolves around an individuals disposable income and a business’ operating costs. The property tax cap is thought to increase an individuals disposable income by decreasing his/her yearly property tax payments. The more money an individual has available the more consumer goods and services he/she can purchase. Because of the additional funds available, the property tax cap is thought to increase spending and consumer consumption.
The property tax is also thought to have a positive effect on businesses. Generally businesses or organizations operate on large pieces of land. The property taxes associated with business can be astronomical. With a property tax cap present a business can cut its cost in the form of decreased property taxes. Fewer costs allow the business to produce more products, or hire more employees. This both, decreases unemployment, and enables the business to meet the growing demand present due to the increased amount of disposable income.
Property tax caps in theory are thought to bolster a community’s economy. The effects of property tax caps, however, does not guarantee positive externalities like increased disposable income or more efficient production for business. There are numerous economical and sociological factors that can alter the effect that property tax caps have on a community.

General Characteristics of Real Estate law

General Characteristics of Real Estate law

There are many unique characteristics attached to real estate or ad valorem law which greatly affect the value of land and the subsequent tax levied. The general characteristics for an individual's annual ad valorem tax can be split into two basic groups:economic characteristics and physical characteristics.

Each variable within these two groups will shift the assessed value of land and the amount of tax levied on a property owner. Real Estate, like most products have a value attached that fluctuates greatly based on physical and economic factors. The value of land is calculated based on a detailed formula; the assessment calculation will encompass such variables or characteristics on a piece of land or property.

The economic and physical characteristics that influence the assessment value of land and the subsequent ad valorem tax levied are scarcity, improvements made to the land, area preference, and permanence. Like all products, the value of a good will shift depending on its availability. The economic factors that go into the ad valorem tax are all dramatically connected.

The supply of land, like all things has a ceiling; more land cannot be magically produced or manufactured. The scarcity of land varies greatly based on geographic region or neighborhood. Less densely populated states will offer a prospective buyer more land than congested urban areas or states. The more densely populated a state is the more scarce the land becomes, thus making it more valuable and prone to higher ad valorem taxes. 

The term scarcity as it pertains to the ad valorem tax can also be synonymous with demand. Pieces of property in desired neighborhoods will often times have a high demand. The perpetual demand is a result of factors like good schooling, wealthy area low crime etc. When the demand is constantly high, the supply of property is generally scarce. The high demand mixed in with a limited supply will generate higher ad valorem taxes; the same is also true when the variables are flipped, a low demand in a less densely populated market will yield lower ad valorem taxes.

Directly attached to scarcity is improvements or renovation made on the land. Dilapidated or run down areas are less likely to have renovated property than those areas which are highly sought after. Improvements made on one house of a neighborhood will not only effect the value of the refurbished home in question, but also of the surrounding homes, and the community as a whole. Renovations will increase a property's assessed value which will consequently increase the ad valorem tax. 

That being said, improvements made to one's property are beneficial; they offer a landowner a substantial tax exemption, which in essence should more than offset the increased rate of taxes. Improvements also pertain to businesses entering a neighborhood-if a large corporation builds an office in a community the value of the neighborhood and the ad valorem tax will increase due to an influx of jobs or increased attraction.

Similar to renovations or appearance, permanence is also an economic characteristic that effects the ad valorem tax. The infrastructure of a building or piece of land is reviewed thoroughly during the assessment process. Homes or land in areas with limited utilities such as sewers, drainage, water, and electricity will be greatly devalued and decreasingly taxed. Areas that do offer these utilities, and are built from good materials will have a higher value and thus an increased ad valorem tax.

These above economic factors are all appropriately tied into area preference. The common cliche attached to real estate is "location, location, location." The value of a home will fluctuate greatly based on the location of the land, and how strongly it is desired. If you need legal advice and assistance, contact real estate lawyers.

The Freedom of Property Tax Implementation

The Freedom of Property Tax ImplementationThe local
tax system in America is organized extensively between jurisdiction. This
individuality allows each community to appropriately implement a cap on real
property taxes based on necessity. For instance, if a localities real property
taxes are soaring as a result of rising property values, a community has the
freedom to institute a specific tax cap based on individual need. Due to the
increased real property taxes in the aforementioned situation, citizens of
the  particular community may experience a significant financial strain.
Individuals who pay property tax without a cap are susceptible to drastic rate
increases. These increases are not minor considering real property taxes are
the main source of revenue for a local government. The rate at which
individuals pay property tax is based on the assessment value of the land, the
jurisdiction’s budget, and economic factors which fluctuate the previous
variables. The tax system in the United States extends freedom to towns,
counties, and states to implement appropriate caps on real property taxes.

Land owners who are forced to pay property tax do so in congruence to the local
communities budget. Local governments must levy real property taxes to provide
a community with necessary public goods such as:public education, law
enforcement agencies, parks, and infrastructure construction. The revenue obtained
through the issuing of real property taxes pays for such goods. The locality’s
budget is vulnerable to market shifts. A budget deficit will occur, if an
economic disaster hit a community, whether it be in the form of numerous
foreclosures, high unemployment rates, or a macro-economic recession. Costs
associated with public services are constant-schools, parks, roads, and law
enforcement agencies need to be maintained properly. When a community is forced
to operate under budget they have one of two options to balance the
deficit:they can cut out specific public services i.e. eliminate school
programs, or they can raise real property taxes. The issue is a double-edged
sword; when the latter is chosen, the individuals within the community lose
disposable income necessary for driving the consumer market. Real property
taxes can also raise proportionately to rising property or assessment values.
When demand for a community’s land increases or becomes more desirable the
local government is able to drive up real property taxes. Without the
implementation of a tax cap landowners will suffer from increased rates.

Given the circumstances, the implementation of a property tax cap can be
essential for struggling corporations or small businesses. Mounting real
property taxes also puts a strain on businesses. When a corporation is
experiencing mounting costs they invariably attempt to curb the effect by
limiting production or firing employees. The effects of these cost-cutting
procedures can be crippling to a community. To stabilize employment rates and
production a community can implement a real property tax cap.

The freedom that communities possess in regards to the levying of real property
taxes is necessary to balance the relationship between the rate and the
landowner. Local government’s have varying needs; the implementation of a real
property tax cap may be necessary for one community while superfluous for
another. If landowners are pinched by rising rates, if their disposable incomes
fall to unsustainable levels, a community will implement a real property tax
cap. The tax cap will ensure those landowners who pay property tax that their
rates will not increase based on inflation, wages, or a fixed percentage. The
effects of a tax cap will not be immediately tangible, however over the long
run, the institution of a property tax cap will positively affect income,
investment in the state, employment, consumption, and production.

Limitations on Property Taxes You Should Know

Limitations on Property Taxes You Should Know

As of 2007, only five states in the U.S. have zero limitations on some aspect of real property tax. For the remaining forty five, there is at least one of the common limitations applicable in regards to real property taxes. Real property refers to land, improvements made on the land, or anything attached to the land, such as the building of houses or factories.
In essence anything that is immovable on a piece of land is considered real property. Real property tax is the largest source of revenue for local governments, however, drastic changes in property value or the housing market will highly effect the rates at which individuals pay. The relationship between housing prices and the ad valorem taxation model, is very sensitive. When the market dips or spikes the amount of tax an individual will pay on his property greatly shifts. Limitations on real property taxes are created to limit this shift.
In 1978, real property taxes in California rose to levels of absurdity. Taxpayers started a revolt, and refused to pay such exorbitant fees. Under pressure from its citizens, proposition 13 was adopted by the California congress. This much-needed legislation restored property values back to their 1975 levels, and instituted a cap real property tax for subsequent years. Proposition 13 also placed a ceiling on how property value could be assessed, and restricted annual increases of more than 2%.
Statewide limitations on real property tax provides a direct constraint for an individuals payments. State laws in regards to the ad valorem tax vacillate throughout the nation; the federal government has awarded each state power to govern the land within its borders. 
There are five common limitations imposed on real property taxes, and whichever limitation yields the lowest payment for the individual will be applied to the party. Each form of limitation applies a floor and ceiling on revenue and tax rate limits. The regulations explicitly limit local government behavior. Examples of common forms of limitations are as follows: 
The 1% constitutional limit: The 1% rule has been adopted by many states, the percentage may vary but the justification is the same. The percentage rule is the primary limitation placed on real property tax. The provision limits the total regular property tax levy to a maximum percentage per $1,000. For a 1% rule the levy would be taxed at a maximum of $10 per $1,000 of the total market value of the property.
Statutory maximum rate for districts: establishes a maximum levy rate for counties, cities, and towns. This statute regulates jurisdictions specifically and not on a state level. The statute establishes a maximum aggregate rate on average of .05%.    
A 101% limit-A 101% rule established a limitation on the amount to which property taxes can increase annually. Limitations each year for most districts are around 101%, thus if a district has real property taxes of 1,000,000 the following year can only raise to a level of $1,001,000.
The 4% rule-The property tax limitation adopted by New York. Under this rule property taxes can only increase annually by a rate of 4% or 120% the CPI. The CPI, or consumer price index is an economic tool used to track inflation rates.

Property Taxes in Michigan

Property Taxes in Michigan

aUp until 1994, Michigan state property taxes were levied based on a property’s assessed value or 50% of the property’s market value. This equation which was common around the country, quickly fell into disfavor because of the variable’s sensitivity towards macroeconomic changes, and shifts in property value. State property taxes were highly elastic to property values; if there was an increase or decrease in the housing market the state property tax would proportionately shift. 
This relationship was too sensitive and it created a financial burden for many landowners. If property values swelled, a drastic increase in state property taxes would be inevitable. More appropriately for Michigan, if the economy crumbled, the market value would fall precipitously. The decrease would lead to a lack of revenue for local governments, which in turn would disable the proper allotment of public services.
The close relationship between property values and state property taxes created widespread problems when the market experienced drastic shifts. Michigan’s answer for curbing these effects on landowners was to institute a new piece of legislation known as Proposal A.
This framework which was adopted in 1994, created a equation to determine state property tax. Proposal A based the state’s property tax on the land’s taxable value. Under Proposal A, the taxable value of a property is capped at either an increase of 5%, or at the rate of inflation. Whichever of these two is lower, will determine the amount of increase for the state property tax. If inflation was 6% for the given year, the state would increase property taxes by 5%. If inflation was 4% for the given year, the state would increase property taxes by the rate of inflation, or 4%.
Proposal A allowed property values to increase with corresponding boom in the housing market during the 90’s while maintaining  a stable level of state property taxes. The downside to Proposal A, unfortunately, is that it can also allow property values to decline without a corresponding decrease in state property taxes. The legislation only caps the increase of annual rates, it does not take into account a market that is declining.
For instance, if an individual owned a piece of land in Michigan for decades chances are there is a significant difference between the assessed value of the land and its taxable value. Generally, the taxable value of land increases more slowly than the property’s assessed value. 
Even with a sharp decline in the property values over the last couple of years, the assessed value is still likely higher than the taxable value. Since Proposal A bases the state property tax off of the property’s taxable value a decrease in the yearly rate is not likely. With inflation present odds are a landowner will actually see an increase in their annual state property taxes.
The only exception found in Proposal A in regards to tax caps is in regards to land that is sold or transferred. During the year after the property is sold or transferred, the cap enforced by Proposal A is lifted, and the taxable value is reset to the assessed value. 
Land that is transferred or sold, essentially adopt the state property tax laws from before 1994, or the institution of Proposal A. Following the reset back to the assessed value, the cap is then reapplied for the subsequent years. This scenario can lead to dubious circumstances. If an individual purchased land within the last couple of years, it is possible that his/her assessed value is less than the capped value.

Property Taxes in New York

Property Taxes in New York

New York State has the highest municipal taxes in America. Local governments in New York, possess a property tax rate 79% above the national average. As property values proportionately increased, the property tax rates during the mid 90’s swelled to astronomical rates. The majority percentage of local taxes in New York stem from the state’s soaring property tax rate. 
Over the past 30 years, property tax rates in New York commonly rose at twice the rate of inflation and salary growth. To ease the tension of increasing property tax rates, and create a lifeline for landowners, the institution of an effective property tax cap has been fiercely discussed by Governor Patterson in the past few months. The property tax cap, which was passed in 2008, but later revised, aimed to limit the amount to which property tax rates can rise annually. A property tax cap would ensure land owners in the state that their annual payments would not drastically increase.
New York State is home to nine of the top 10 counties in America in regards to highest property taxes. The hefty fees placed on landowners in New York has caused many individuals, families, and businesses to move elsewhere. Just recently Governor Paterson spoke about the need for an effective property tax cap, and illustrated his concern over high property tax rates. 
“The growth rate of property taxes in this state is unsustainable, especially for the elderly, working families and small businesses just starting out,” Governor Paterson said. “All of us understand that the cap is a blunt instrument, but it is needed to force hard choices and to address the fact that New York’s local tax burden is the highest in the nation.”
Sixty-Two percent of New York’s property taxes are administered and levied by school districts. Despite substantial increases in state aid for education, school property taxes continue to swell beyond what most property owners cannot afford. The first and most pressing issue concerning Governor Patterson’s new legislation on property tax rates, aims to limit the annual increase of school property taxes. Under Paterson’s cap, the amount of taxes to be collected by a school district will be limited between the lesser of 4% annually or 120% of the annual CPI. 
The CPI, or consumer price index is an economic tool used to measure the rate of inflation. Therefore, under Paterson’s legislation, if inflation were over 3.33% a 4% cap would be instituted; if inflation is under that level than the CPI would be multiplied by 120% to find the cap. 
If a school district or community is struggling with money the town members have a right to increase the cap or terminate it through a town vote. This piece of legislation aims to restrain tax property growth, and limit annual increases so rates lower to a more manageable level.
In March of 2100, Governor Paterson expanded on the property tax cap legislation that was instituted in 2009. The previous tax cap only focused on school district’s levies. Granted, property taxes levied by school districts accounted for the majority of revenues, but this new proposal places a limit on all property tax growth. 
Like school district tax levies, the local government’s tax levies will now be limited to annual increase by the lesser of 4% or 120% of the CPI. This bill aims to provide relief for all taxpayers, and impose fiscal discipline on the local governments of counties, cities, and towns throughout the state.

The Facts About Property Exemptions

The Facts About Property Exemptions

Ad valorem taxes, which are taxes derived from the assessed value of personal property or real estate, is the largest form of revenue for state and municipal governments. All landowners, whether individual or corporate, are subjected to such a tax. 
The ad valorem taxation model varies based on jurisdiction, the quality of land, and other physical factors that make up the assessment calculation. Ad valorem taxes will deviate based on such characteristics, but each jurisdiction will offer property owners a resource used to mitigate such a burden. Tax exemptions offer tax payers a break; the amount levied will dissipate based on what the government has rendered exempt or excluded from being taxed.
Exemptions in regard to ad valorem taxes are defined as property that has been expelled from the assessment roll. Once property has been excluded from assessment the ad valorem taxation will not be applied to real property. 
Tax exemptions in regards to the ad valorem taxation model vary greatly based on jurisdiction, but general guidelines do exist depending on an individual’s length of residency, age, military status, energy choices, or renovation procedures applied to the land. 

Homestead Exemption:

The majority of states offer a form of Homestead Exemption based on how long an individual has resided on a particular piece of land. In order to qualify for this exemption, an individual must maintain residency for the majority of the year in the particular location or jurisdiction in question. 
This exemption will be available as soon as the land is purchased, but the minimum terms required vary based on state-for example, in order to receive this exemption in Maine an individual must live in the state for at least a year, while in Alabama, the exemption will be available within six weeks of ownership. The Homestead Exemption decreases a home’s assessed value by a fixed percentage or a dollar amount. Most states offer this form of relief for ad valorem taxes, however, variables vary greatly based on jurisdiction, which greatly alter the amount of exemption available. 
Some states for example, tie the exemption to criteria such as:age, amount of income, or education level. In addition to contrasting variables, states also differ in time limits for filing and re-application requirements.


Exemptions for Seniors or the disabled:

Mostly every state will offer some sort of exemption to elderly homeowners or the disabled. These exemptions are tied into relief programs which allow both groups to seek reductions in ad valorem taxes. The eligibility requirements for such exemptions also vary based on state tax law. For some states the refund may not kick in till an individual reaches 65, while other states may start at 60 or 70 years of age. Disabled homeowners will inevitably be required to show proof such as eligibility as it pertains to Social Security disability benefits or medical history.
Renovations:

By improving one’s land an individual will often times benefit in the form of reduced ad valorem taxation. Communities appreciate refurbished land; improvements made to property create a more pristine image of a locality.  The exemption will vary based on the improvement and state tax laws, but exemptions for renovations often exist for multiple years. 
The exemption will also vary based on the land in question-how old is the piece of land being renovated? When was it last renovated? What condition was it in before renovation? Dilapidated projects that haven’t been refurbished in years will often lead to substantial exemptions.
Military Veterans:
Exemptions for ad valorem taxes are available to veterans who own homes (primary residency), served during wartime, and were honorably discharged. Some states will extend benefits to all veterans, regardless of participation in war, but the previous description is more common among states. These exemptions will also be extended to the spouses or families of a deceased veteran.


Exemptions for energy improvements:

The installation of energy efficient systems in one’s home can reduce the amount of ad valorem taxes levied. Many states exclude the value of “green” improvements from a property’s assessed value. 
The level of exemption or requirements for exemption vary based on state, but all can be found the governments website or https://www.dsireusa.org/. Eligibile upgrades often include the installation of solar panels, photovoltaics, geothermal heat pumps, or solar water heaters.
There are three types of exemptions in regards to ad valorem taxes:full exemption, partial exemption, and special assessment. The level of exemption or type applied varies on state tax law, and the type of exemption based on the above categories. 
Nobody enjoys paying ad valorem taxes, but often times homeowners are unaware of the benefits offered through the various exemptions. Having complete knowledge of the exemptions available, and the particular state laws applied can greatly lower an individuals yearly ad valorem taxation.
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