1. PROPERTY TAXES THE MOST VOLATILE POLITICAL ISSUE FACING STATE AND LOCAL GOVERNMENTS TODAY

2. PROPERTY TAXES 1. What is the Property Tax?

3. PROPERTY TAXES 1. What is the Property Tax? A tax on the value of property (usually real estate) that a person owns

4. PROPERTY TAXES 2. What are property taxes made up of?

5. PROPERTY TAXES 2. What are property taxes made up of? 3 parts – County Tax Municipality Tax School Tax

6. PROPERTY TAXES SO 3 DIFFERENT GROUPS GOT THEIR HANDS IN MY POCKETS!!! WHERE IS MY VOTER REGISTRATION FORM AND WHAT LINE DO I MARK FOR THE LIBERTARIAN PARTY!!!

7. ADVANTAGES OF PROPERTY TAXES 1. An even and stable flow of income for local governments 2. They protect continuity of basic services like police, fire, schools, streets, parks, etc. Makes the local municipality more independent and gives them greater control over their own affairs

8. ADVANTAGES OF PROPERTY TAXES Alternatives are cutting programs or raising other taxes at the state level

9. DISADVANTAGES OF PROPERTY TAXES 1. They are regressive. 2. It is a tax on an unproductive item and value of real estate is not always a key element in a person’s income 3. It impacts harshly on the elderly and on those who have no children in the school system

10. DISADVANTAGES OF PROPERTY TAXES 4. The system is based on an assessment process that is out of date and/or corrupt (tax exemptions given out like candy). 5. Other revenue options exist

11. PROPERTY TAXES OKAY – SO HOW DOES THIS WHOLE PROPERTY TAX PROCESS WORK???

12. PROPERTY TAXES Who sets the tax? The individual taxing authority – what?

13. PROPERTY TAXES Who sets the tax? The County Board of Commissioners The Township / Borough Supervisors The School Board

14. PROPERTY TAXES How do they decide what the tax is? 1 st – Set the Budget 2 nd - Calculate the value of all real property in the municipality 3 rd - Divide = that equals the tax rate of property called the MILLAGE RATE

15. PROPERTY TAXES Who sets the value of real property in the county? The county tax assessor does a property assessment

16. PROPERTY TAXES How do they assess the value of my property? It starts with MARKET VALUE – what a willing buyer would pay and a willing seller would accept

17. PROPERTY TAXES How do they assess the value of my property? The they apply the Uniform Assessment Ratio to the market value Montco = 100% of 1996 value Bucks = about 5% of value or the 1973 value of your land

18. PROPERTY TAXES How do they assess the value of my property? For example – in Montco – a house valued at $500,000 in today’s market would be assessed at the 1996 value or about $300,000 but in Bucks it would be assessed at 5% of the current market value

19. PROPERTY TAXES How do they assess the value of my property? This math calculation gives the assessed value of the property

20. PROPERTY TAXES This is where it gets easy! Now you apply the millage rate to the assessed value and that gets you the Property Tax Due

21. PROPERTY TAXES What??? Example A house assessed at $100,00 in NPSD would be set this way $100,000 X millage rate of 19.6744

22. PROPERTY TAXES What??? 1 mill = 1/1000 or 1 mill =.001 – so you have to move the decimal place 3 spots to the left $100,000 X.0196744 = the property tax due

23. PROPERTY TAXES Where do I find out information about my property assessment and the millage rates for my property taxes? The Montgomery County Board of Assessments