A lot of people wonder just how the government calculates property tax rates and why your bill seems to change every year. First, there is a difference between property tax rates and a property tax assessment. The rate is an overall percentage at which your property is taxed. The assessment is a valuation of your property's worth, so that the government can determine how much money it is taxing. States have different rules for conducting a property tax assessment, but the goal is to get an accurate value for the taxable property. This is usually determined by the replacement cost of structures and property, or the market value of the property calculated via comparison to similar properties. Once a property tax assessment has been conducted for an entire region, the local taxing entity then determines property tax rates which are subject to percentage caps imposed by the law. The taxing authority can choose to divide its yearly projected expenditures by the assessed value of all property in the region, assigning a a portion to each property. It may also choose to estimate its budgetary needs based on different tax rates until it finds a reasonable rate. Even though no one enjoys fluctuating property tax rates--or taxes in general--they serve an important function. Taxes pay for local services, such as schools, police and fire departments as well as maintenance of  infrastructures.

Blog inspired by article written by Stephanie Rabniner featured on RISMedia and can be seen here:  http://rismedia.com/2011-03-27/how-do-property-tax-rates-work/