A Dallas property owner’s property tax concerns can be difficult terrain to navigate without help. From property tax relief strategies to understanding a property tax assessment, dealing with your property taxes can be more than you bargained for without the proper help.
As if standard property tax issues were not complicated enough, the topic of ad valorem property tax is another area that owners need to be further educated on. Hegwood Group presents some of the most common questions asked about ad valorem and how property owners should address any concerns when they arise.
What is Ad Valorem Tax?
Ad valorem taxes are taxes that are imposed by local government entities. When translated from Latin, it means, “according to value.” They are imposed on real estate or personal property and are a tax that is based on the value of a transaction or the value of the property.
Typically, ad valorem taxes are applied at the times of a transaction, but in the case of real estate property tax, may also be imposed annually. These taxes are paid by real estate owners based on the value of the property being taxed. These properties usually include land, improvements to land, and personal real estate.
The main difference between ad valorem and transactional taxes are that ad valorem taxes are determined annually, and standard transactional taxes are added on at the time of a transaction.
How is Ad Valorem Determined?
Ad valorem taxes are usually calculated each year on Jan. 1. When determining how much these taxes will be, the municipality that enforces the taxes looks at the assessed property value (the property’s fair market value), and taxes a percentage of that value.
When examining the fair market value, an owner must understand the definition. Fair market value is the price that the seller of your property is willing to accept, should you decide to sell.
When determining your ad valorem tax, appraisers take the cost of the property into account, the depreciation of the property, market data, the way the property is used, and the estimated net income generated by the property on an annual basis.
What Are Some Tax Issues and Solutions?
Your real estate property taxes can add up to a large sum each year and as a property owner, it would be wise to look into ways to minimize your annual cost.
Property tax consultants like the experts at Hegwood Group will be able to help you properly value your property and give you an accurate value estimate. By understanding your property’s estimated value, you can better determine what your annual ad valorem tax will be.
Consultants can also help you file a formal assessment of a property tax appeal with your local County Assessor’s office. As a property owner, you may not know that there is a timeline for you to file formal a property tax appeal. Should you miss the deadline, a consultant can file a formal assessment appeal that can be used to correct tax errors.
Should further action need to be taken in order to resolve errors or reduce your tax cost, consultants can serve as mediators that can assist you with post-appeal representation.
Hegwood Group Has Property Tax Consultants for Your Ad Valorem Questions
If you are a local property owner that has concerns regarding your ad valorem tax, the Hegwood Group is prepared to schedule a consultation that will answer the questions you have.
We are a full-service provider of property tax consulting services and have a thorough understanding of the industry we serve. Our team of expert consultants is able to assist with property tax consulting, business personal property tax consulting, ad valorem tax consulting and more. If you have any questions contact us today and find out how we can control and minimize your yearly property tax expense.