Property taxes in the United States are levied by local governments, and the revenue belongs to local governments. Property taxes across the United States range from 1 to 3. There is no unified tax standard. Different states and different counties and cities within the same state have different tax rates. Generally speaking, the northwest region is relatively low and the southeast region is relatively high. There are two factors that affect property taxes, one is the tax rate, and the other is the valuation of the house. The valuation is completed by a specialized government department and the homeowner will be notified of the valuation results. The current property tax reduction policy is only for U.S. citizens and has nothing to do with Chinese investors.

1. Which department collects property tax in the United States?

Property taxes are not levied by the federal government, but are mainly levied by local governments (counties and cities). The revenue belongs to local governments. The property taxes collected by local governments are used for the city and the city where the property is located. Various state expenditures, including public education funding, library construction, public security, and infrastructure construction.

2. What is the tax rate of property tax in the United States?

1. Taxes vary from state to state

The real estate tax in the United States ranges from 1 to 3. Different states and different counties and cities in the same state have different tax rates. For example, in In the greater Seattle area, the city of Seattle, Bellevue, and Sammamish use different property tax rates: the property tax in Seattle is less than 1, in Bellevue it is about 1, and in Sammamish it is 1.2.

2. Low in the northwest and high in the southeast

The property taxes in the northern states and the west coast are lower, basically between 1-1.5, with the lowest in Hawaii, only 0.28; while in the south Property taxes are generally higher in states. For example, in Texas, the property taxes in various cities range from 2.5 to 3.5. For properties of the same price, the property taxes required to be paid in different cities vary greatly. For example, a house worth $1 million would only pay $2,800 in taxes per year in Hawaii, while in Seattle it would have to pay $10,000. If it was in Houston, Texas, it would have to pay about $33,000. But looking at it from another perspective, the same two-story independent villa is sold for US$200,000-300,000 in a high-quality school district in Houston, so the property tax is about US$6,000-9,000; in a high-quality school district in Los Angeles, the selling price may be As high as 1 million U.S. dollars, but the real estate tax in Los Angeles is only 1/3 of that in Houston. Calculated, the real estate tax is about 11,000 U.S. dollars, so we need to look at it comprehensively.

3. How to collect property tax in the United States?

1. What factors are related to property tax?

Property tax is calculated by multiplying the government’s assessed value of the house by the area’s tax rate. So there are two factors that affect property taxes: one is the tax rate, and the other is the valuation of the house. Under the same tax rate, if the house price is higher, the tax will be higher. The valuation is based on the most recent property transaction price, and then the assessed value is determined by referring to the condition of the building on the ground, the size of the land, and equivalent or similar properties in the same area. The government assessed value is only used as a basis for calculating property taxes and cannot be used as a price reference in real estate transactions. Usually, the government assessed value is lower than the actual value and transaction price of the house on the market. However, due to high land prices in popular areas, the land price often exceeds the house price in house valuation; while in remote areas, the house value is higher than the land value.

Each valuation result will be notified to the homeowner before the property tax is paid, listing the valuation content, including the value of the house itself, the value of the land, etc. Homeowners can request a revaluation if they disagree with the government's valuation. In addition, the time and frequency of tax payment vary from region to region. Philadelphia only collects taxes once a year. The Property Valuation Office will send property tax forms to homeowners in December every year. The homeowner must pay taxes before March 31 of the following year. The real estate tax in California is paid in two installments, the first is on November 1 of that year; the second is on February 1 of the following year; in New Jersey, it is paid four times a year.

In recent years, the housing market has been rising again, so house valuations have also begun to increase. Coupled with the increase in tax rates, housing taxes have become one of the burdens on ordinary Americans, especially the middle and lower classes.

2. Is property tax really expensive?

(1) Real estate tax is high, welfare and value-added prospects are good

A large part of the real estate tax paid every year is used for infrastructure construction and education allocation in the city where the property is located, which is a burden But it’s also a benefit. For example, this property worth $2.55 million was traded in Seattle in 2014. Of the property taxes paid in 2015, 32.05 was used for school funding in the school district where the property is located, 5.13 was used for the library, and 22.55 was used for the Washington State Education Fund. That is about 60% of the direct or indirect funding for education. It is no wonder that this high school in Kirkland, Seattle, ranks among the top 100 public high schools in the United States. Therefore, if you pay more property taxes, the residents who live here can directly enjoy the benefits, and the prospects for real estate appreciation in this area will be good, thus forming a virtuous circle.

(2) The holding period is long and the tax rate is relatively low

For example, two adjacent properties located in the same community in Irvine, Los Angeles, are very similar in style, size, year, and hardware , purchased for around US$300,000 that year, and now have a market value of around US$1 million. One of them, A, was sold this year, while the other, B, has not been sold 10 years after it was built. When it comes time to collect property taxes, you will find a very interesting phenomenon. The transaction price of A that was just sold was US$1.02 million. The government will determine the new property tax assessment value based on this recent transaction, which may be between US$990,000 and US$1.02 million. between. The property tax in Irvine is 1.2, so A has to pay about 12,000 US dollars in property tax. Since B has not been sold, the government will refer to the transaction price ten years ago as the basis for the assessed value, and the annual increase or decrease in the assessed value is lower than the annual change in the CPI (Consumer Price Index). Therefore, the government’s property tax assessment value for B may be It’s only $500,000, so you only need to pay $6,000 in property taxes. It can be seen that the real estate tax policy in the United States encourages long-term holding of real estate. The longer the holding period, the proportion of real estate taxes in annual expenses decreases year by year.

4. Is there any reduction or exemption policy for property taxes in the United States?

First of all, it needs to be emphasized that only those with U.S. citizenship can enjoy the property tax exemption policy. There are relevant regulations in various places where you can apply for exemptions and exemptions, and the amount of exemptions is based on personal income. When the government sends out your property tax bill each year, it will include instructions on how to apply for tax relief. Taking Fairfax County as an example, the current tax exemption regulations are that people over 65 years old and people with disabilities who own only one self-occupied house and whose annual income is less than $52,000 are exempt from paying all property taxes. However, those from US$52,000 to US$62,000 are exempt from paying 50, and US$62,000 to US$72,000 are exempted from paying 25.

The United States began to levy real estate taxes in the early days of the founding of the country. As early as 1792, four states levied real estate taxes. The property tax law passed in 1798 included provisions for taxing real estate and land separately. By the early 20th century, every state in the United States had enacted regulations to levy real estate taxes. The property tax policy system is complete and operates in a standardized manner, which is worthy of reference.