PROPERTY TAXES

THE MOST VOLATILE POLITICAL
ISSUE FACING STATE AND LOCAL
GOVERNMENTS TODAY
PROPERTY TAXES
1.
What is the Property
Tax?
PROPERTY TAXES
 1.
A
What is the Property Tax?
tax on the value of property
(usually real estate) that a
person owns
PROPERTY TAXES
2.
What are property
taxes made up of?
PROPERTY TAXES

2. What are property taxes made up of? 3
parts –
 County Tax (Courts and justice system)
 Municipality Tax (Township or Boro) – police
and local services
 School Tax – education

PROPERTY TAXES

SO 3 DIFFERENT GROUPS GOT
THEIR HANDS IN MY POCKETS!!!

WHERE IS MY VOTER
REGISTRATION FORM AND WHAT
LINE DO I MARK FOR THE
LIBERTARIAN PARTY!!!
ADVANTAGES OF
PROPERTY TAXES
1. An even and stable flow of income
for local governments
 2. They protect continuity of basic
services like police, fire, schools,
streets, parks, etc.
 Makes the local municipality more
independent and gives them greater
control over their own affairs

ADVANTAGES OF
PROPERTY TAXES

Alternatives are cutting programs or
raising other taxes at the state level
DISADVANTAGES OF
PROPERTY TAXES
1. They are regressive.
 2. It is a tax on an unproductive item
and value of real estate is not always a
key element in a person’s income
 3. It impacts harshly on the elderly and
on those who have no children in the
school system

DISADVANTAGES OF
PROPERTY TAXES
4. The system is based on an
assessment process that is out of date
and/or corrupt (tax exemptions given
out like candy).
 5. Other revenue options exist

PROPERTY TAXES
– SO HOW DOES
THIS WHOLE PROPERTY
TAX PROCESS WORK???
OKAY
PROPERTY TAXES
Who
sets the tax?
The individual taxing
authority – what?
PROPERTY TAXES
 Who
sets the tax?
 The County Board of
Commissioners
 The Township / Borough
Supervisors
 The School Board
PROPERTY TAXES
How do they decide what the tax is?
 1st – Set the Budget
 2nd – Calculate (Assess) the value of all
real property in the municipality
 3rd - Divide = that equals the tax rate of
property called the MILLAGE RATE

PROPERTY TAXES
 Who
sets the value of real
property in the county?
 The county tax assessor does
a property assessment
PROPERTY TAXES
How do they assess the value of my
property?
 It starts with MARKET VALUE – what a
willing buyer would pay and a willing
seller would accept

PROPERTY TAXES
How do they assess the value of my
property?
 Then they apply the Uniform
Assessment Ratio to the market value
 Montco = 100% of 1996 value
 Bucks = about 5% of value or the
1973 value of your land

PROPERTY TAXES
How do they assess the value of my
property?
 For example – in Montco – a house
valued at $500,000 in today’s market
would be assessed at the 1996 value or
about $300,000 but in Bucks it would be
assessed at 5% of the current market
value

PROPERTY TAXES
How do they assess the value of my
property?
 This math calculation gives the
assessed value of the property

PROPERTY TAXES
This is where it gets easy!
 Now you apply the millage rate to the
assessed value and that gets you the
Property Tax Due

PROPERTY TAXES
What???
 Example
 A house assessed at $100,000 in NPSD
would be set this way
 $100,000 X millage rate of 22.7049
 Careful – this is a little bit different than
doing a percent

PROPERTY TAXES
What???
 1 mill = 1/1000 or
 1 mill = .001 – so you have to move
the decimal place 3 spots to the left
 $100,000 X 22.7049 = the property tax
due
 $100,000 X .0227049 = Property tax
due

PROPERTY TAXES
Where do I find out information about
my property assessment and the
millage rates for my property taxes?
 The Montgomery County Board of
Assessments
 http://boa.montcopa.org/boa/site/default
.asp
