Effective Property Tax Rate
The effective property tax rate is the amount of property tax paid as a percentage of the property's market value. It differs from the nominal or statutory tax rate, which is applied to the assessed value (which may be a fraction of the market value).
Significance
A lower effective property tax rate is generally favorable for property owners and investors, as it reduces the ongoing cost of ownership. For example, Arizona is noted for having a relatively low effective property tax rate, which can make it an attractive location for real estate investment.
Collection
Property taxes are typically collected by local governments and are often paid by homeowners through Mortgage Servicing managed by their mortgage servicer.
Source material
- Investment Property in Arizona
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