7 Facts About Real Estate Tax You Should Know

When you own a home, you are responsible for paying property taxes. If you are buying a property or have already bought one, then this is something that you need to attend to and plan for. Property taxes can vary by country or state, and they will be different depending on the value of your property and your local tax laws.

While property taxes may seem like a simple thing to pay, they can cause severe financial problems if not considered when making financial plans. Therefore, it is vital to attend to these taxes as soon as possible to avoid financial debt.

This blog will provide you with some knowledge about real estate tax:

#1. What is real estate tax?

The real estate tax is a fee that the property owner pays to the government. The amount of tax varies depending on the property’s location and value.

#2. Why does the government levy tax on real estate properties?

Under the R.A. 7160 or the Local Government Code of 1991, the government has the authority to levy taxes to real estate property owners.  The government levies taxes on the real estate owners to create their own source of revenue. These revenues will fund the public expenditures.

#3. Where do your taxes go?

The local authorities levy taxes to fund public services like schools and roads. The amount of funds that go into these organizations varies. They differ in the amount of money they collect in that area and how much money they generate from other sources like sales taxes or income taxes.

#4. How is real property value determined?

The amount of tax varies on the type of property, its location, size, condition, and its age at the assessment time. The property tax rate can be low in a low-income area, but it can also be high in a high-income area. Additionally, rates can depend on whether the property is residential or commercial.

#5. What is the purpose of the tax?

The purpose of the real estate tax is to generate revenue for the government. It also helps redistribute wealth by taxing those who have more than others.

#6. How to avail real estate tax discount?

According to Section 251 of Republic Act No. 7160 or the Local Government Code of 1991, you can avail a discount not exceeding 20% of the annual tax due if you pay your taxes on or before the date set.

#7. What are the consequences of late or non-payment of Real Property Tax?

Tax is a crucial part of the real estate industry. If you don’t pay your taxes on time, there will be consequences that include fines, penalties, and interest charges.

The consequences of late or non-payment of Real estate Tax can be quite severe. In order to collect unpaid taxes, the authorities will take action. Such actions include imposing fines, penalties, and interest charges to the real estate owner, as well as legal action against them if they do not pay up.

Owning a home or real estate property comes with a lot of responsibility. One of these responsibilities is paying property taxes on your home. Moreover, property taxes are adjusted annually according to the inflation rate. Therefore, make sure you allot a budget for these costs when preparing your budget allocations.

The Real Estate Earn Ph is here to help you navigate through the world of real estate investment and the like. We will provide you with learnings and tips to help you in buying a real property, managing your money, and more from our published blogs.

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