Understanding Property Taxes: A Tale of 2 Car Cities

If you’re considering purchasing a home understanding the local property tax landscape is crucial. Property taxes can significantly impact your annual housing costs and vary notably across different regions.

We’ll start by comparing two cities that are driven by large automotive companies: Georgetown, Kentucky (Toyota), and Dearborn, Michigan (Ford).

Note: I’m not an accountant or tax advisor. The information in this article is for informational purposes only.

Georgetown, Kentucky

In Georgetown, located in Scott County, the effective property tax rate is approximately 0.71%, which is notably lower than both the national median of 1.02% and the Kentucky state median of 1.02% (Source: Reduce Your Property Taxes). This favorable rate translates to a median annual property tax bill of about $1,373, based on a median home value of $196,100.

Georgetown: How Property Taxes Are Calculated

Property taxes in Georgetown are determined by multiplying the assessed value of your home by the applicable tax rates set by various taxing authorities, including the state, county, city, and local school districts. The assessed value is typically based on the fair market value of the property, as determined by the Scott County Property Valuation Administrator (PVA). Homeowners may also be eligible for exemptions, such as the Homestead Exemption for those aged 65 and older or 100% disabled, which can reduce the taxable value of the property (Source: scottkypva.com).

Comparing Georgetown to Nearby Areas in Kentucky

When evaluating property taxes, it’s helpful to compare Georgetown’s rates with those of neighboring cities:

Lexington (Fayette County): The effective property tax rate in Lexington is approximately 1.24%, resulting in a median annual tax bill of about $2,392 on a median home value of $206,100 (Source: Reduce Your Property Taxes).
Frankfort (Franklin County): Frankfort has an effective property tax rate of around 1.20%, with a median annual tax bill of approximately $1,548 based on a median home value of $129,000 (Source: Reduce Your Property Taxes.)

These comparisons highlight that Georgetown offers more affordable property taxes relative to nearby cities, which can be a significant advantage for homeowners.

Dearborn, Michigan

In Dearborn, property taxes are calculated based on the assessed value of your home, which is typically 50% of the market value. This assessed value is then multiplied by the local millage rate to determine your annual tax bill. For instance, if your home is valued at $200,000, the assessed value would be $100,000. If the total millage rate is 53.2955 mills, your annual property tax would be approximately $5,329.55 ($100,000 x 0.0532955). (Source: State of Michigan | Michigan.gov, Dearborn, Michigan is located in Wayne County).

Dearborn: Millage Rates and Their Components

Millage rates in Dearborn comprise various components, including city operations, schools, county services, and special assessments. These rates can fluctuate annually based on budgetary needs and voter-approved measures. For example, in 2023, the total millage rate for a principal residence in Dearborn was approximately 48.95 mills. (Source: State of Michigan | Michigan.gov).

Comparing Dearborn to Nearby Areas in Michigan

When evaluating property taxes, it’s helpful to compare Dearborn’s rates with those of neighboring cities:State of Michigan | Michigan.gov+4Koordinates+4State of Michigan | Michigan.gov+4

Dearborn Heights: The effective property tax rate is approximately 1.44%, resulting in a median annual tax bill of about $1,625 on a median home value of $126,800 .
Detroit: Detroit has an effective property tax rate of around 2.18%, with a median annual tax bill of approximately $2,600 based on a median home value of $119,800.
Livonia: Livonia’s effective property tax rate is approximately 1.93%, leading to a median annual tax bill of about $3,200 on a median home value of $165,700.

These comparisons highlight that Dearborn’s property taxes are moderate relative to nearby cities, offering a balance between tax rates and community amenities.

Factors Influencing Property Taxes

Several factors can influence your property tax bill:

Georgetown

- Assessment Value: The assessed value of your property, determined by the PVA, forms the basis for calculating property taxes.
- Tax Rates: Rates set by the state, county, city, and school districts can vary annually based on budgetary needs and voter-approved measures.
- Exemptions: Eligibility for exemptions, such as the Homestead Exemption, can reduce the taxable value of your property, thereby lowering your tax bill. (Source: Reduce Your Property Taxes).

Dearborn

- School Districts: Homes in different school districts within Dearborn may have varying millage rates.
- Special Assessments: Additional charges for services like road maintenance or public safety can affect your total tax bill.
- Exemptions: Michigan offers exemptions for principal residences, seniors, veterans, and others, which can reduce taxable value.

Georgetown vs. Dearborn

Median Home Value

- - Georgetown: ~$196,100
  - Dearborn: ~$200,000

Property Tax Rate

- - Georgetown: ~0.71% (lower than the national average)
  - Dearborn: ~2.66% (higher than then national average)

Median Property Tax

- - Georgetown: ~$1,373
  - Dearborn: ~$5,329 (based on 53.2955 mills)

For Your Consideration

Understanding property taxes is vital for budgeting your annual housing expenses. It’s advisable to consult with the Scott County PVA (Georgetown) or Dearborn Assessor’s Office or a local real estate professional to get accurate and up-to-date information tailored to your prospective property.

By comprehensively evaluating property taxes alongside other factors like home value, community services, and school districts, you can make an informed decision that aligns with your financial goals and lifestyle preferences.

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