What is the reason for paying property taxes?

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UPDATED: Feb 11, 2022

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Written By: Jeffrey JohnsonUPDATED: Feb 11, 2022Fact Checked

Property taxes are charged to landowners by local governments, essentially requiring that homeowners pay for the privilege of having land in a given area. Although the property tax laws differ slightly from state to state, property taxes serve a common purpose. In many cases, the assessment method used to determine property taxes owed in each state will also have some variation but will essentially follow similar basic principles.

Property taxes are charged on both raw land and on buildings or “improvements” as they are called. This means that if you own a plot of land, even if you have not yet build a house or erected a structure on it, you will still be taxed. The amount you are taxed is typically based on a percentage of the assessed value of your property. This is referred to as an “ad valorem” method of assessing taxes. Other possible methods of determining the amount of taxes due include charging a certain amount for each acre or housing unit. Some states will also charge lower tax rates fro lands used for agricultural purposes. For instance, Pennsylvania has a “Clean & Green” Act that allows for lower taxes on eligible agricultural and forestry land.

The purpose of property taxes is to pay for the necessary infrastructure that keeps towns and cities operating efficiently. Typically property taxes will support the local police and fire department. Property taxes also generally pay for the public school system; this may be included in your general property tax bill or you may receive a separate bill for “school taxes” depending on where you live. Because property taxes are largely responsible for the support of the school system (along with federal and state funding), property taxes are usually higher in areas with exemplary school districts. Local roads and other government offices are also subsidized with tax dollars.

Do You Have to Pay Property Taxes?

In general, every person who owns land and/or who has improved that land will need to pay property taxes with a few very limited exceptions. This applies to both businesses and private individuals. Failure to pay taxes can result in extra interest charges and penalties. Ongoing failure to pay can result in a lien being placed on the property and/or can result in the forced sale of the property in a tax sale to generate the funds owed.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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