You and Rising Property Tax

How much did you pay last time for the property tax? Ok, fine. Are you ready to pay for this year. You are ready! Ok, fine. But how much do you may need to pay this year? How much percent increase may be there this year? It may double this year from the previous one. Yes, it may.

The property taxes are rising steeply. You need to pay almost triple of the amount you paid two years back. The home prices and the taxes went up with the housing boom, but it did not come down with the reducing home prices.

Rising and sky high property taxes may imbalance your plan and financial position. The taxes have increased 50 percent over a period of 6 years from 2000 to 2006. In the same time household income dropped 2 percent and inflation rose 17 percent.

There are several reasons of such increase in property taxes.
1. Local government and states are depending more on the property taxes to reduce the revenue shortfall
2. Increasing home prices have increased the property taxes

Government is trying to cut taxes on homes and instead trying to get more revenue by increasing the sales taxes. Five states have cut their property taxes. Twenty one other states have tried to provide relief to the homeowners from higher bills. In 2008, the senate may come up with more legislations to find out a solution for the problem.

Some measures taken by various states
Washington – 1 percent cap on increase of annual property tax
New Jersey – 20 percent cut in tax, cap of 4 percent on annual increase
Florida- figuring out a property tax cut soon in January
Illinois- 7 percent assessment cap
Indiana- rebates and also homestead credits to homeowners