There are so many quotes by famous people on taxes. Lao Tzu once said, “The people are hungry; it is because those in authority eat up too much in taxes”. Taxes are a hot subject in all things business and personal finance. On the one hand tax is necessary and serves noble purposes. Yet on the other hand taxation is riddled with controversies. There are several different types of taxes. Taxation is a subject that can come off as quite complex to the layman. Our core focus today is property taxes. Property tax is tax imposed on the market value of real and personal property such as land, buildings, vehicles, boats, and so on. Let us discuss on how to live without paying property taxes.
Table of Contents
- Property Taxes Overview
- ‘Property’ Can Refer To Many Things
- If You Qualify For Exemption
- Common Types Of Property Tax Exemptions
- Never Try To Cheat The System
Property Taxes Overview
Property tax codes or rates vary from state to state. That is why it is always important to be abreast with what applies to your context. By context we are referring to the state your property in. In some instances the property taxes can be different in the respective counties within a state. These are all things you need to find out and be well-versed in. Some states have relatively low property taxes whereas others have sky high ones.
Low property taxes are not automatically a blessing as you might assume. Though of course it is makes property ownership relatively easier. States with high property taxes tend to have more developed public infrastructure. Anyways, for the most part, every property owner is mandated to pay property taxes. Regardless, the question of how to live without paying property taxes usually pops up. To a greater extent it is about whether or not you qualify for exemption.
‘Property’ Can Refer To Many Things
When many hear the term ‘property’ they quickly think of actual buildings. Typically that is the case that the property in question will be a building. However, there are instances when it refers to more than just buildings. For example, a vehicle can be termed a property. A truck can also be termed a property. Depending on your state, you might be required to pay property taxes on such items and more.
Just like it is for building properties, there can also be applicable exemptions on paying property taxes for non-building properties. There are several US states that do not charge property taxes on vehicles. These are Alaska, Ohio, Delaware, Oklahoma, Florida, Oregon, Georgia, Pennsylvania, Hawaii, South Dakota, Idaho, Tennessee, Illinois, Texas, Maryland, Utah, New Jersey, Vermont, New Mexico, Washington, New York, Wisconsin, and North Dakota.
If You Qualify For Exemption
You can be exempt from paying property taxes. The laws governing this vary depending on where your property is. You also need to know that information on property tax exemptions tends to be hidden. A little bit of digging around can help you discover details on property tax exemptions. For instance, the disabled, veterans and senior citizens can be exempted from paying taxes. Every state has some framework for property tax exemption.
Common Types Of Property Tax Exemptions
Let us break this down so that you have an appreciation of property tax exemptions.
Property Tax Exemptions Based On Property Type
There are classifications of properties that are exempt from paying property taxes. Common examples of such properties are properties owned or run by faith-based organizations, not-for profit organizations, and government. There could be more classifications but these are some of the most common.
Property Tax Exemptions For Veterans
This, depending on the state your property is in, can refer to two things. One, it can generally refer to any army veteran. Two, it can specifically refer to disabled veterans. That is why you need to know what applies to your particular location. US states that have full property tax exemptions for disabled veterans include Alabama, New Hampshire, Arkansas, New Jersey, Florida, New Mexico, Hawaii, Oklahoma, Illinois, Pennsylvania, Iowa, South Carolina, Maryland, Texas, Michigan, Virginia, and Nebraska. To know more, get in touch with your respective local state or county authorities.
Property Tax Exemptions For Senior Citizens
By ‘senior citizens’ we are referring to people aged above 65 years. Not all states allow such property tax exemptions but some do. US states that allow them are Alabama, New Hampshire, Alaska, New York, Florida, South Carolina, Georgia, South Dakota, Hawaii, Texas, Mississippi, and Washington. Bear in mind that these are states that allow full property tax exemptions for senior citizens. It is possible that in other states they might allow partial exemptions. Do find out to have accurate details applicable to your context.
Property Tax Exemptions For Miscellaneous Scenarios
In some places, renovating a property can make you eligible for property tax exemption. As a means to encourage renewable energy uptake, setting up renewable energy systems on your property can make you exempt in some places. These are examples of scenarios that can qualify you to not pay property taxes. Since this can be specific to one state or a few, you have to find out about the state or county your property is in. It is unfortunate that such exemptions might not always be public knowledge as should be.
Never Try To Cheat The System
You can find people telling you of ways to avoid property taxes. For as long as the way does not involve exemptions, chances are it is illegal. There are always ways to cheat the system but the risk might not be worth it. Living without paying property taxes is something you must do when absolutely sure. In other words, do it only when you are absolutely sure it is legal.
Not paying property taxes, when caught, comes with hefty penalizations; you can even lose a property. The tempting thing is that skirting paying property taxes can carry you for a stretch. The day you get caught though is when you will wish you had just paid your property taxes. The best thing you can do is to engage a local taxation expert, especially to find out about eligibility for exemption.