Real Estate investments are taken as the long-term source of continuous income for landlords. Since every property is an asset so it is taxable and for this, an annual amount has to pay to the government. These taxes are the primary source of income for the government. For property/landowners the tax can be paid to the local state government/Municipal department based on the location of the property. All tangible real estate owned by individuals and organizations is applicable for property taxes. This includes office buildings like Prime Square, houses, and other rented premises.
While the property tax depends upon several factors, the location of the property is one of the major factors. The taxes vary from state to state and every civic corporation calculate taxes based on respective assumptions. In general, the first step in order to calculate the property tax is the assessment of the property in question. This majorly includes determining the square feet area of land and the type of property – commercial/land or residential. Also, its occupancy status – self-occupied/rented-out, amenities like car park, solar panels, discharge systems are included. Taxes considerably vary on factors like the year of construction, type of construction – single floor, multi-store, villa, commercial hub, etc). The parameters like floor space index and carpeted square area of the property play an important role to get correct tax calculation for the property.
The calculation of property tax is a must to understand for landlords, tenants and organizations. There are chances that the property tax bill may be higher than it should be. This can be caused by errors in the information available with the government. The rising property taxes can hit the budget of the individual.
Below are a few steps that can help to ensure that the correct tax Is being paid.
Incorrect information –
The property assessors can make errors while recording the data. The property tax solely depends upon the information gathered and saved into the systems. The accidental typos can result in paying significantly higher property tax. As the taxpayer, one must verify all the information available with the authorities. In cases of property transfers, rarely does the new owner bother about the calculation of the property tax.
Re-Access the property –
It is always better to re-evaluate the property. This can help to reduce the property tax since it gives opportunities to avail tax credits, exemptions or any new special rates introduced by authorities. The classification of the property determines the amount of tax for each property.
Comparative Analysis –
Verify the taxes on similar properties will always help to check whether taxes are calculated correctly.
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