In this video, you will learn about assessed value of the property. Here is how assessments work. Imagine there are three houses.
The houses are all different sizes. Thus, each house pays different in taxes. The tax rate is determined by what the township needs. Assessment places market value on each property. The total assessment is used to calculate the tax rate. Another year will go by, and property values will increase but the cost of providing services has stayed the same. All owners still pay the same taxes as before because the cost of services has stayed the same. Assessment increase does not mean the taxes paid go up. Then the net effect of the new values will make tax rates go up. There will be a new distribution of tax. If the cost of services goes up, the result will be a new tax rate. A tax increase can happen this way. If another home is built in the town, it will all be split up evenly and there will be a new tax rate. Everyone will pay less. An increase in property value does not always mean a higher tax rate.