Property Tax

Property taxes are a major source of funding for local services, such as schools, roads, police, fire services and waste collection. Owners usually pay them annually or in instalments.

The tax is typically calculated by multiplying the property's assessed value by a local tax rate. For example, under a hypothetical rate of 1%, a home assessed at 300,000 would owe 3,000 a year. Assessed values may be updated periodically to reflect market prices, and owners can often appeal if they think the assessment is too high.

Systems vary widely. Some countries tax the value of the land and buildings; others use bands based on property value, or charge occupiers rather than owners. Many offer reductions for primary residences, older people or low-income households.

Property taxes affect the true cost of owning a home or commercial property. Homebuyers often include them in their monthly budget, and many mortgage lenders collect property tax payments along with the mortgage through an escrow account, paying the tax on the owner's behalf when it is due.