What is property tax & why should property tax be paid?

Real estate tax is a house property tax that the house owner must pay every year. The amount is the estimated value of the property multiplied by a certain tax rate (approximately 0.8-3%). Real estate tax consists of three taxes: city tax, county tax and school district tax. City Tax is used by the city government for public expenses, such as police stations, the fire stations, Libraries, public transportation, park management, etc.; county tax is invested in areas under the county government, such as the tax bureau, the industrial and commercial bureau, the court system, prisons, car licenses, health and immunization, etc.; and The independent school district tax is used to pay elementary, middle and high school teachers' salaries, school facilities and other related education expenses.

How is property tax calculated?

Take a 200,000-dollar house in Piano as an example. Piano’s municipal tax rate is 0.49% and it charges $980; the county tax (Piano belongs to Coffin county) is 0.32%, which is charged $640; the school district tax rate is relatively high at 1.45%, charging $2,900, the total house tax paid is $4,520. Generally speaking, the property tax is the sum of the three taxes in a certain proportion. Due to the differences in tax rates between cities, counties, and school districts, the tax rates of the three taxes in each city are different. In general, the property tax in the Dallas area is about 2.5% of the total value of the house.。

What are the real estate tax relief methods recommended by tax experts?

The following are several common ways of real estate tax relief:

1. Application for Residence Homestead Exemption is a legal and effective way to help homeowners to reduce or exempt the property tax. For high rising real estate taxes, it is very important to understand and implement effective ways to reduce real estate tax relief.
   A regular main residence exemption (General Residential Exemption) is a real estate tax exemption for the main family residence that the owner or family lives in from January of each year. Note that this reduction is for owner-occupied housing rather than rental housing. If you are married, you need to fill in the application form for the names of you and your spouse, as well as the ratio of ownership. The time for each county to apply for Homestead Exemption will vary slightly, usually from January 1 to mid-April. Applicants can search the county homestead exemption form through the Internet, download the form, fill in and attach copies of the supporting documents to the appraisal office of the county.
   Elderly exemption (Age 65 or older Exemption) – this is an exemption that homeowners aged 65 and above can apply for. The senior citizens' exemption can reduce the total value of the house by about 5%. Can apply simultaneously with General Residential Exemption.
2. get a professional organization for Property tax protest evaluation. Specifically, a professional organization evaluates the specific conditions of the applicant’s house (such as housing area, housing usage, etc.), uses more specific evaluation methods, compares the information in the system database, and raises objections to the applicant’s housing and property tax. The purpose of the relief. Generally speaking, this kind of service can effectively reduce the property tax of 5%-10%, and the service fee of the related company is 4096-50% of the applicant's property tax reduction amount. If the property tax is not successfully reduced or exempted, the property tax protest agency will not charge related fees.

In addition, a few people can also reduce property tax through other means, such as disability exemption or agricultural exemption. For example, if the land owner applied for agricultural exemption for his land, the real estate tax will be reduced from the $120,000 to $2,000. However, for this type of relief application, relevant requirements must be met. One will need to inquire tax experts for the relevant requirements.

What other ways can foreign people and new immigrants who come to work in the United States carry out effective real estate tax planning and management in their daily lives?

1. Taxpayers who have mortgage for a house can declare bank loan interest deduction when filing their tax returns.
2. The two-year property tax paid in the same year for claiming itemized deduction. For example, when the income of the declarer reaches a certain stage, the property tax in 2014 will be paid in January 2015, and the property tax in 2015 will be paid at the end of 2015. It is possible to obtain different degrees of tax relief. However, this is a tax planning situation and requires professional tax experts to help plan.
3. In addition, for friends who have multiple rental houses, it is recommended to establish an LLC (Limited Liability Company) to protect their assets effectively. For example, an LLC lends to a creditor. In some cases, the LLC cannot repay the loan as scheduled due to funding problems. The creditor can only sue the LLC and not the individuals behind the LLC. Similarly, if a tenant has an accident in the LLC’s assets, the tenant can only sue LLC and not individuals. Therefore, one is recommended to use this way for asset protection if he/she have more than 4 rental houses.

The yearly rising of real estate tax may result in a corresponding reduction in the profit margin of real estate investment. It is recommended that anyone who plan to invest in real estate or who have already lived and invested in the real estate have a comprehensive understanding of real estate, and consult professionals about asset investment, so as to effectively reduce tax expenditures and increase the profit on investment.