Decoding Your Property Tax Assessment
If looking at your tax bill brings back memories of being a freshman in high school and suddenly realizing you are in trig class with a bunch of seniors, you are not alone (and I think the tax folks like it that way). But I digress.
At NFREinc. We’re often asked about taxes – How exactly are they figured? Will they go up based upon my purchase price? Where did they get that number from? Here are a few points that should help put you on a path toward understanding…
- Let’s start with some simple math: Your property tax bill equals the assessment of your property times the tax rate of the township you are located in.
- To get the taxable assessment, the local assessor estimates the fair market value of your property within the town you live. The important thing to remember is that all properties within a municipality are assessed at a uniform percent of their fair market value.
- To get the tax rate of your municipality, they take the total amount needed to fund the budget (called tax levy) and divide by the total of all the assessed values.
- Regarding your fair market value – Unlike other areas in the country, Southold Township does not automatically reassess your property when you purchase. This is commonly referred to as the Welcome Stranger Law. Your property can however be reassessed when the town issues you a building permit because you are adding value to the property.
While its fun to joke about the complexities of the tax system, our local assessors typically do a great job and are very approachable. At the end of the day, everyone pays his or her fair share of taxes and despite the pain it causes trying to figure it all out, the funds go to all the services that make the North Fork such an amazing place to live.
Another great source of information is the State Website where you can find the pamphlet HOW THE PROPERTY TAX WORKS. (pub 1113)
While this is not intended to be tax advice, (for that always consult your tax professional.) If you have any follow up questions, please don’t hesitate to contact your NFREinc. Professional today!