How Your Tax Bill Is Calculated

Learning how taxes are calculated is important to know as a home owner. Property tax bills are determined by three numbers: the property assessment, the tax rate and any exemptions. While the tax rate cannot be changed or argued, the property assessment can be lowered by filing a tax grievance on your property.

The property assessment is based on your property characteristics such as the square footage, the year built, its location, and construction type. How and when the assessment is made, is up to the town, some towns assess properties every year, some every other year and others only when the property is sold. For example, if the assessor believes your home to be worth $300 thousand and your town’s assessment ratio is 10%, your home’s assessed value is the multiplication of those values in this case $30 thousand.

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The tax rate is determined by the school, the town and the city, and is decided based upon budgets for government services such as public school, police departments, garbage pickup, etc. So, suppose the county has $500 million in property value, meaning all the houses in that county add up to a total of $500 million, and the county needs around $5 million to complete town projects/pay their employees, the tax rate at the county level would be 1%. Now the same happens in the school and the town and they all get added to find the total tax rate.

Lastly, New York has various exemptions for qualifying residents. Every home owner should be aware of them and take advantage of them if they can because they’re there for you. Exemptions vary in the way they are applied. For example, a School Tax Reduction or STAR is only applied to school taxes where as a senior exemption is applied to city taxes. Ultimately your tax bill is determined by multiplying your assessment by the total tax rate and subtracting any exemptions. If for any reason you believe your overpaying in taxes, file a grievance with Aventine today!