Real Estate Tax Terms

Here are some of the real estate tax terms you may want to read before you meet with your tax consultant:

• Tax Credit: A tax credit is a dollar-for-dollar reduction in the amount of tax that is due. A tax credit is more valuable than a tax deduction of the same amount. An income tax credit is one that directly reduces the amount of Income tax paid by offsetting other income tax liabilities.
• Tax Rate: The rate at which the property is taxed is usually a percentage and is shown per hundred dollars of the property’s value.
• Assessment Ratio: This ratio is a percentage of your home’s fair market value that each assessor uses to determine the property’s assessed valuation. This ratio may vary from county to county.
• Notice of Revision: This is a notice mailed to the property owner after a property has been reassessed.
• Uniformity: This is a legal principle that governs property tax assessments. It states that all property in a given area must be assessed at the same level. This principle of uniformity is the basis for many successful assessment appeals.
• State Multiplier: This is the state equalization faction, a number the state assigns to each county, depending on the assessment ratio the county uses to calculate assessed valuation. The multiplier either raises or lowers the assessed valuation to the state-mandated level. The multiplier ensures that taxpayers in each of the state’s counties pay the proportionate amount in property taxes.
• Tax Deed: This is a type of deed used to convey title after the real property is sold at an auction by public authority for non-payment of taxes, or the instrument is used to convey legal title to property sold by a governmental unit for non-payment of taxes.
• Tax lien: This is a claim against real estate property for a specified amount of unpaid taxes. The government has the right to enforce a claim against the property of a person owing taxes.
• Tax Sale: This is a public sale of property by a government authority as a result of non-payment of taxes.