Anyone who buys commercial or residential property in their life must have listened to these terms: real estate taxes and property taxes. But there is a common question often asked by property owners: Is real estate tax the same as property tax?
We use both of these terms as substitutes for each other in most situations. And it’s correct to use them in speech, but the technical meaning differs. Also, the time it takes to do each tax varies depending on the type of tax, the number of properties/real estates and tax complexities. When we talk specifically about taxes, both of these terms are different.
Although property taxes refer to both personal property taxes and real estate taxes, let’s explore this in more detail:
What is Real Estate Tax?
Real estate taxes are the taxes applicable to commercial and residential properties. Real estate taxes apply to land or permanent structures on land. The government, city, or state levies these taxes. The amount of real estate taxes depends on the worth of your property. It includes the area you are living in and the cost of your property.
Quick Note: You need a qualified tax accountant to handle real estate taxes.
The cost of real estate tax is generally higher in big cities and lower in rural areas of the country. Taxes in big cities are higher in commercial areas than in residential ones.
What is Property Tax?
Let’s discuss property tax. It is a hybrid term that refers to both real estate tax and personal property tax. While real estate taxes are about land or structures on land. And personal property applies to moveable assets like:
- Vehicles you own, including your cars and trucks.
- Machinery
- Computers or furniture.
- Boats.
These taxes can feel complicated and prone to human errors. Getting services from a professional business tax preparer is suggested!
Why Do We Pay Property Tax?
Well, these property taxes provide financial strength to our local government services. The public pays taxes to support the services and infrastructure that keep our community functional, property taxes help to provide funding for local services such as:
- Schools
- Police
- Fire departments
- Road infrastructure
- Parks
- Public health programs.
Taxes help local governments support their long-term development programs. They ensure they operate with efficiency and avoid financial stress.
Understanding Real Estate Taxes vs. Property Taxes
In general, we use real estate and property taxes as the same. But when we talk about taxes, their technical meanings are different. Real estate taxes are about the physical property you own, such as a house or a commercial building. Whereas, property tax has a wide range of taxable assets.
How Are These Taxes Paid?
The process of paying real property taxes and real estate taxes is the same. Every year, on January 31st, the payee will receive a tax bill from the local tax office. This bill will include the due amount and payment deadline if someone does not pay before the delinquent date. It can cause interest charges and penalties for late payments. You might also lose your property due to tax foreclosure.
If you’re having trouble paying your NYC taxes, Tax King can help. We can assist you in applying for a tax extension. It gives you more time to pay and enables you to avoid penalties.
How to get Help With New York Real Estate Tax?
If you are struggling with New York real estate taxes, you don’t need to face it alone. At Tax King, we are experts in helping property owners navigate the complexities of the New York tax system. Our tax preparer team is here to guide you every step of the way, whether you are dealing with missed payments, the threat of foreclosure, or high property tax rates. We also offer services like applying for a tax extension and even a tax review assessment to check if we can lower your tax bill.
Just reach out to Tax King Inc for a consultation so that we can evaluate your situation! Contact us today to get started!
FAQ’s
If you don’t pay your NY property taxes on a delinquent date, it can lead to penalties and interest charges. If your tax remains unpaid for a specified period, the additional tax cost will increase by the total amount you owe. In case of further delay, your property can lead to a tax lien.
The local government can also seize your property to satisfy the debt. We call this process tax foreclosure. It’s crucial to pay your taxes by the due date. If you need assistance in applying for a tax extension, contact the Tax King!
Yes, the property tax is included in the mortgage payment linked with a special account named escrow. A portion of your amount goes into this account every month to balance the property taxes and homeowner’s insurance.
You need to pay your taxes directly to the tax authority if your mortgage does not include an escrow account.
No, property taxes and real estate taxes have different technical meanings. Real estate taxes apply to land and the structures on the land. At the same time, real property taxes are used for movables like vehicles, machinery, and business equipment.
You can lower your NY property taxes by doing a few things.
- Appeal for an assessment.
- Apply for exemptions.
- Make energy-efficient upgrades.
- Consult with a Tax King professional for more options.
In New York, property taxes are due quarterly (4 times a year);
- July 1st
- October 1st
- January 1st
- April 1st
Make sure to contact your local tax attorney to get any specific information regarding NY real estate taxes.
The personal property taxes are applied on movable property you own, like vehicles, business equipment, furniture, and other items you own. These taxes are paid annually, and the amount of payable tax varies by location.
