Taxing jurisdiction can allow some exemptions that will reduce a property’s assessed value by a specified amount and lower the subsequent property tax bill. The property’s taxable value is the assessed value less all applicable exemptions.
Please note that the property tax bill is not reduced by the exemption amount. The exemption reduces the assessed value that results in a tax saving based on the exemption amount times the tax rate.
Property tax savings from exemption = exemption amount x tax rate
For example, a county has an exemption of $15,000 for qualifying property owners. The total tax rate in the county is 1.5%. What is the tax savings for property owners qualifying for this exemption?
Property tax saving from exemption = $15,000 x .015 = $225
All property owners qualifying for an exemption in the example above will receive a tax savings for $225. Note that the tax savings is not $15,000!
Exemptions can be granted for a variety of reasons, sometime for political purposes. Examples of exemptions include assessed value reductions for blind, disabled, military veterans, and older property owners.
A common exemption is the homestead exemption. The homestead exemption may be available to state residents who use their property as their primary residence or homestead. This exemption is used to give homeowners, a large group of people who often vote in local elections, a property tax break and to encourage homeownership (or, looking at it from another perspective, to place a greater tax burden on investors, business property, and second home owners).
In addition to exemptions, some properties are granted tax-exempt status. Tax-exempt property owners are not responsible for paying any property taxes and tax-exempt properties do not add any value to the tax digest. Examples of typical tax-exempt properties include government owned building, churches, and some properties owned by non-profit organizations.
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http://www.examiner.com/a-1475359~We_can_t_go_on_this_way.html
Editorial
We can’t go on this way
The Baltimore Examiner Newspaper
2008-07-07
BALTIMORE - This is not the title to a bad breakup ballad. What it is, is a song of Baltimore City’s decline. Each year the future dims as more and more taxpaying businesses move out; more and more move in exempt from property taxes.
The latest Maryland Nonprofit Employment Update from Johns Hopkins Center for Civil Society Studies confirms this trend, as do city Finance Department numbers. According to the study, released last week, nonprofit jobs account for almost one-third of the total private jobs in the city. That percentage keeps creeping higher. Since 2002, nonprofits have added new jobs while the private sector has shed them.
We do not bemoan the talent places like Johns Hopkins’ multiple institutions, some of the biggest employers in Baltimore, bring to the city. We welcome it. And the state and city welcome the income taxes those jobs bring, and the property taxes their employees who live in the city pay. But Baltimore cannot afford to subsidize anyone else without bringing in new businesses that pay property taxes.
The city lost 2,443 taxable properties since 2000 — or close to a property a day — while the number of tax-exempt properties rose 46 percent to 19,042.
It also regularly gives major tax breaks to developers who say it’s not economically feasible to build in a city with rates more than twice as high as the rest of the state. They are right. But that leaves the only people left to finance city operations, scheduled to cost 10.4 percent more next year, the shrinking number of businesses and homeowners. Asking them to pay more is criminal — especially in these economic times.
The latest national figures show the economy lost 62,000 jobs — 91,000 in the private sector — in June. The only growth was in government jobs, meaning fewer taxpayers must finance more government as they are less able to pay for it.
If Mayor Sheila Dixon wants to turn this city around, she needs to lower property taxes now. That solution turned San Francisco from a wasteland in 1978 to a city with a growing population and budget surplus only four years later. The decision is hers. The longer she waits to cut property taxes, the less likely the renaissance she so desires will happen under her watch.
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