What are Personal Property Taxes?
When you bought a car, house, or a motorcycle have you ever thought of the taxes you’ll be paying on it for years? With the exception of my house I honestly don’t think about personal property taxes, but it’s something many of us have to budget.
Every year, we get a statement from the county on how much we need to pay for our cars’ personal property tax. We also have our escrow account take care of our house’s tax bill. If you’re not expecting one or it’s higher than planned, it can really put a damper on your finances.
Some people might not be familiar with them or they’re just starting out and want to see what they can do about it. They have questions that they’d like answered. What are personal property taxes? How are they calculated? Is there anything you can do to reduce it? I’ll try to tackle them and hopefully help you save some money.
Personal Property Tax Assessments
For many cities, property taxes are a huge source of revenue, so if you try to not pay it expect penalties. It’s a tax based on the value of one’s property as determined by a municipalities and its usually a specified percentage. Property can include (but not limited to) boats, cars, or homes.
Your property is checked by local public officials called tax assessors who are supposed to calculate the unbiased market value of it. For cars they may use NADA book value as an example. You’ll receive a bill well in advance of the taxes due date, so hopefully you’ll put something aside in your bank account for it.
Dealing With Your Personal Property Tax Bill
Sometimes, though, you may disagree with how the city or county has calculated your property. You may feel like it’s too high. For example, some areas of the country are still experiencing much lower housing prices yet your bill shows a high assessment. You could contest it and ask the city or county to reassess it considering current marketing conditions.
Many times, you have to submit a written request along with documentation that proves that your position is valid. If it looks reasonable, a local tax assessor will investigate your claim. These assessors will re-analyze and calculate your property’s current value.
People have successfully argued their case and have lowered their property tax bill. While there is paperwork involved most agree that it helped them financially.
Thoughts on Personal Property Taxes
I know many people have opinion on local taxes and how it affects their community and their own bottom line. I’d love to hear your take on it.
What the tax rate for personal property in your area? Have you ever had to contest your tax bill? Did you win? How long did the process take?