Through the property tax reduction, homeowners see a reduction in the amount of property taxes paid.
Property taxes are taxes levied on the property of an individual or business. In most countries they are administered at the local level and fall into two categories; real property taxes and personal property taxes. A property tax abatement is any program that lowers or eliminates the burden of property taxes.
In many countries, the main source of property tax relief comes in the form of a reduction or limitation of property tax levied on the property of elderly or disabled persons whose income falls below certain levels. Some states or provinces also have provisions for property tax limits or exemptions for a taxpayer who does not meet the age and disability requirements of the programs, but is the surviving spouse of someone who qualifies. A credit may also be available to a younger nondisabled taxpayer who meets stricter maximum income limits.
Property that houses a church cannot be taxed.
In the United States, real estate tax cannot be applied to the property of churches or other registered nonprofit organizations, as long as that property is not held solely for the purpose of generating income. For example, property that houses a church may not be taxable, but a movie theater that is open to the public regularly as a means of producing income may be subject to property tax, even if it is owned by a religious order. . Historic properties listed on the National Register of Historic Places may also be exempt from property tax, depending on state and local area laws.
Some states, such as Colorado and Pennsylvania, offer property tax relief in the form of a property/rental tax credit for residents who meet certain age, disability, or income limits. Many districts can also reduce property taxes based on the age and longevity of the home, or freeze the amount of the property tax when a resident reaches a certain age. Other states may eliminate the personal resident estate tax of a veteran with a disability entirely, depending on the degree and cause of the disability.
Property tax also applies to personal property such as vehicles, inventory, and works of art. These are generally ad valorem taxes, collected annually and based on the value of the property. Localities may offer tax benefits on vintage vehicle ownership as long as the owner pays a multi-year license fee, which then converts to a lifetime license. Vehicles that have been modified with wheelchair lifts from other handicap accommodations may also be entitled to reduced property taxes.
The property tax reduction can come in the form of an income tax deduction. A deduction is an amount that is deducted from gross income before calculating income tax. In the United States, if an individual itemizes his deductions, he can subtract the amount paid for real estate and personal property taxes. Temporary property tax reduction programs were used, which allowed those who did not specify to add a portion of the property taxes paid that year to their standard deductions.
Personal property tax is calculated on shares and all business property owned by companies in some places. A personal property tax relief provision that exempts or limits a portion of these taxes can be used to stimulate the local economy during an economic downturn. Regions may also offer property tax incentives to businesses considering moving to the area.