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This article was fact-checked by our editors and Rachel Weatherly, taxation product expert with Credit Karma Tax.

Property taxes are a significant source of income for local governments. But while they assist fund key public services, land taxes can be a financial burden for some Americans.

Normally, U.S. families spent 1,556 on land taxes nationwide in fiscal year 2016, based on a 2019 Tax Foundation analysis — even though collection amounts vary by area.

While local governments generally manage real estate taxes, states typically have some oversight. When it comes to real estate tax relief, most states have established programs aimed at easing real estate tax burdens on homeowners who qualify.

How do property taxes work?

Property taxes are usually based on your geographical area and the appraised value of your home. Local governments typically assess home values, establish tax rates, issue property tax statements and collect taxes under guidelines created by the state government.

A property assessor calculates home values on a regular basis. In certain nations, assessment takes place annually, but the frequency can vary by state. Here’s the way the typical regional government might establish taxable house values.

An assessor will quote a house ‘s market value, compare it to similar properties, and perhaps even check for evidence of home and land developments. When the assessment is finished, the city or county plugs the house worth into its home tax practice. It could take a percentage or dollar amount of the house ‘s assessed value and multiply that number by the tax rate, which is typically set at the county level.

How much are property taxes?

The amount of property taxes varies heavily by area. For instance, Washington, D.C., taxpayers paid $3,535 each year on average in 2019, while Alabama taxpayers paid $548 in 2019, according to a Tax Foundation analysis.

The Tax Foundation points out that land taxes help pay for public services, which can make an area more desirable and also increase residential market values. Assessed values generally move in tandem with market values — and a higher appraised value typically implies a higher tax bill.

But taxation collection practices also differ by country. To keep this bill from ballooning year annually, some states take action to curb real estate taxes. For instance, they may limit how much a tax bill can increase or implement a standard homestead exemption, which automatically reduces a house ‘s assessed value.

How can homeowners pay real estate taxes?

There are two main ways to cover real estate taxes. If you’ve got a mortgage, your lender can wrap your property tax refund into your monthly payment, then cover the bill on your own behalf if it’s due. But if you own a home and have no mortgage, then you pay property taxes directly to your regional government.

What is property tax relief?

Property tax relief programs, sometimes called exemptions, release qualified homeowners from paying part or all of their home tax responsibility. How long the exemption lasts can change depending on your geographical area, and the reason you’re applying for the exemption.

The tax-relief procedure varies with every county and state, and potentially every city. In general, you’ll have to meet specific eligibility requirements, submit an application and provide documents that support your request. Some frequent property tax exemptions decrease or waive property taxes for…

Veterans Surviving spouses Minor children whose parents are deceased Homeowners who lately made energy-efficient home developments Blind, elderly, handicapped or low-income taxpayers.

You may have to submit a new application every year, though some regional governments have extended application deadlines for the 2020 tax season.

Based upon the county or state, there are a few methods to apply for real estate tax relief: online, by email or at your regional tax office. Some states have call centers to reply land owners’ questions. But guidelines change, so check your city, state or county ‘s site for information before you apply.

The application procedure can vary by jurisdiction, but here’s an illustration of how it may work.

1. Obtain an application and inspect the requirements. Local governments often make the application and instructions available on their websites. Read the eligibility requirements carefully to see if you qualify for property tax relief.

2. Complete the application and collect your documentation. The files you need may differ, depending on the application guidelines and kind of deduction you’re searching for.

3. Document the application by the deadline. After you submit the application, ask about next steps and once you will receive a response.

Property tax relief information for specific states.

To find out about real estate tax relief in certain nations, check out these Credit Karma Tax articles.

Bottom line.

Real estate tax relief is designed to do just that: relieve taxpayers from the burden of high real estate taxes. The best way to find out about what property tax aid may be available to you is to stop by your city, county and state websites for information about programs and eligibility requirements.

How has COVID-19 influenced land tax relief?

With the spread of the coronavirus, lots of individuals have lost a reliable source of revenue and are struggling financially. Many counties and states are taking steps to alleviate the property tax burden during a stressful moment. Based upon the state or city, these measures may include extended deadlines, waived fees and penalty cancellations.

Extended deadline.

During the coronavirus pandemic, some cities and states have long property tax deadlines or left the decision to individual counties.

Local governments may also opt to waive penalties and fees, which are typically added to overdue or late payments.

Penalty cancellation.

In certain states, citizens affected by COVID-19 could be able to apply for a penalty cancellation or establish a payment plan for their late tax statements.

Check your locality’s site to learn more. Based on where you live, you may not be able to request a penalty cancellation until after the official tax deadline has passed. Should you request a penalty cancellation, tax relief optima be ready to describe how you’ve been affected from the coronavirus and also to show documentation.

Rachel Weatherly is a tax product expert with Credit Karma Tax. She studied finance and accounting at Western Carolina University and also has worked as a tax analyst. You can find her on LinkedIn.

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