Tax and its significance:
Tax is a certain financial amount charged by the state on its public. The taxes are the revenues for the government through which they work for the betterment and development of their state. There are many different kinds and types of taxes imposed by the state. Broadly, the taxes have been categorized into two types that are the direct taxes and the indirect taxes.
Step 1
The direct taxes are those excises which are imposed directly on an individual or properties, where as the indirect taxes are the one which are imposed through a third party. To ensure a better tax payment system, the government of various countries has introduced many laws and policies. These policies and laws are mandatory to be followed by every individual living under the state. Among many different types of taxes, the real property taxes are important because that tax has to be paid by every individual who owns a property or building.
Step 2
Real property tax:
In order to tax the real property, it is important to understand the meaning of the term. The real property includes all those properties which are attached to the land. The term not only includes the value of the property itself, but also includes the interests and rights of the property.
Step 3
The tax of the real property is the direct tax that needs be paid by the owner. To tax the real property each state and government has their own regulations and policies. However, under common grounds, the state first analyzes the monetary value of the land or building, and then the tax is assessed on them.
Step 4
How to tax the real property:
To tax the real property there are certain guidelineas and procedures followed by the state tax department. Firstly, the state analyzes the market value of the property and this is done by using three different methods, by performing the sale evaluation, the cost method and the income method.
Step 5
• Performing the sale evaluation: in this method of property valuation the tax department analyzes the sales report of the region. During the analysis the department also considers the overpricing, underpricing and the conditions of the region.
• Cost method: in this method of evaluation the department analyzes the cost of replacement of the property.
• The income method: according to the income method of evaluation the department analyzes the income that can be earned if the property will be rented.
The tax department analyzes the cost of the property by using one of the above-mentioned methods and then the cost is multiplied with the fixed assessment rate. The evaluated value is then multiplied with the predetermined property tax rate of the region. The tax rate on properties is computed by the state itself according to their rules and policies. Any individual can tax the real property on their own if they know the real value and tax rate of their property.
Tips to tax the real property:
There are certain simple tips that should be followed by each property and building owner when they want to tax the real property they own. Firstly, they should analyze the cost of various properties in the region as it is considered by the taxation department while they tax the property. Secondly, the owner should have a proper estimate of the cost of their own property as it has a direct impact on the property tax amount.
