Nebraska is often referred to as the "Good Life State" because of the high quality of life it offers residents. It boasts low unemployment rates, a booming job market, and a stable economy.
This makes Nebraska a great place to start a family or invest in real estate. However, when making a real estate investment, it's important to remember that property taxes will play an important part in your expenditure and, for property managers and investors, your bottom line.
Knowledge is truly the key to success when it comes to navigating the complex world of property taxes. To ensure that you have the know-how needed, we have devised this comprehensive guide.
Here, we'll walk you through the various factors that impact the amount you pay, how to pay your tax bills, exemptions that can help you save money on taxes, and so much more. Let's get started!
Understanding Property Taxes in Nebraska
In Nebraska, the market value of your property is used to determine the taxable amount. County assessors establish the market value of properties in the state annually, typically as of the first of January every year.
Residential real estate gets evaluated at or close to 100 percent of its market value, which means that the assessed value should be roughly equivalent to the sales amount for the property should it be sold on the market that same year.
Real and Personal Property
Properties in Nebraska are assessed on the real and personal property values. Let's take a closer look at each of these in the section below.
- Real property, commonly referred to as real estate, consists of land as well as any permanent structures or enhancements attached to it. Residential homes, commercial structures, empty lots, and agricultural properties are included. Local county assessors often determine the value of the real estate, which is then used to determine the property tax amount.
- Personal property is defined as any movable items that are not permanently attached to real estate. Vehicles, livestock, business assets, boats, and machinery are all examples. Keep in mind that while personal property is taxed in Nebraska, the laws and assessments differ based on the type of property and its usage.
How Many Times a Year Do You Pay Property Taxes?
Nebraska taxes on real estate may be paid in two installments. Most cities and counties require the first half to be paid by the first of May and the remaining amount by the first of September each year. However, the dates vary in other parts of the state. In Lancaster, Douglas, and Sarpy counties, property tax payments are due by the first of April and the first of August.
The Consequences of Paying Your Property Tax Bill Late
The importance of paying your Nebraska property taxes on time cannot be stressed enough. You could face serious consequences for failing to pay timeously. Here are some of the implications of not paying your taxes on time:
- Penalties and interest. Financial penalties will be added to your tax bill if you miss the deadline for tax payments. This is generally calculated as a percentage of the total taxable value and can add up over time if your property taxes remain unpaid. Outstanding amounts are also subject to interest charges in addition to penalties, which can set you back even more.
- Liens and foreclosure. Failing to make payment after a specified period could result in the taxing body filing a legal claim against your property for the unpaid amount. This will give it the right to sell your property if the amount continues to remain outstanding.
- Legal action. In some cases, the county or state may take legal action against you for failing to pay your property taxes. This could lead to expensive court costs and legal fees.
Late payment also has a negative impact on your credit score, which can make it challenging to obtain credit or rentals in the future.
How to Pay Your Property Taxes in Nebraska
There are a number of ways to pay your property taxes in Nebraska. However, it's important to remember that different counties or cities have their own payment methods, so it's important to check with your local assessor's office or consult your property tax statements for more information on how to make payments.
How Much Is Property Tax in Nebraska?
There are a number of factors that will influence the taxes property owners pay in Nebraska. This includes the following:
Property taxes are greatly affected by the assessed value of your home. Local assessors often determine the market value of your real estate, which includes the land itself as well as any additions (such as structures or buildings as explained above). The greater the assessed value, the higher the property taxes you will have to pay.
Nebraska Property Tax Rates
Property tax rates vary by jurisdiction in Nebraska. It is typically represented as a percentage of the assessed value. Tax rates are set by various taxing bodies, such as counties, school districts, and other local government entities. These rates can differ dramatically between jurisdictions and will ultimately affect the taxes you pay.
The Classification of Your Property
Different types of real estate are taxed differently in Nebraska. This means that residential property taxes will differ from that of commercial or agricultural properties.
Any Applicable Exemptions
If you qualify for a partial or full exemption, the amount you are eligible for will be deducted from your total tax amount.
How Is Property Tax Calculated in Nebraska?
As a homeowner, investor, or property manager, you must understand how property taxes are calculated in Nebraska. The following formula can be used to determine the amount you will have to pay:
Property Tax Amount = (Assessed Value of the Property X Tax Rate) % 100
Your local county assessor will determine the assessed value of your property. The tax rates are then decided by regional taxing entities such as school districts, counties, and cities.
Keep in mind that any applicable exemptions and deductions are subtracted from this amount to lower the taxable value and overall tax payment.
How to Lower Your Property Taxes Legally in Nebraska
Finding ways to save on your property taxes is an important part of running a successful rental business, as it has a direct impact on your bottom line. No matter which Nebraska county you live in, there are ways to lower your tax bill without breaking the law.
Appeal Your Property Assessment
Suppose you notice that you have been charged high property taxes. In that case, you can file an appeal to dispute the evaluation of the assessed value of your property. Property owners in Nebraska can file appeals with the County Board of Equalization.
If they do not receive positive feedback, they can then take the case to the Nebraska Tax Equalization and Review Commission.
Explore Tax Relief Following a Natural Disaster
In certain cases, tax relief may be allowed for areas where natural disasters have occurred. If there has been a devastating event in your area, be sure to contact your local assessor's office to enquire about any available tax relief.
Check Whether You Qualify for Any Tax Relief Programs
Senior citizens and those with disabilities may qualify for tax relief in Nebraska. Such programs allow property owners to defer their taxes until the property is sold.
Look Into a Property Tax Exemption
In addition to tax relief programs, there are also several tax exemptions for residents in Nebraska. If you meet the criteria, you can enjoy tax reductions or deferrals. Here are some of the exemptions available:
You may qualify for a homestead exemption if your home is your primary residence. This exemption may decrease the property's taxable value, leading to reduced property taxes.
Agricultural Land Exemption
If the property is used for agricultural purposes or as a ranch, you can enjoy a tax reduction.
Exemption for Disabled Veterans
Property tax exemptions may be available to disabled veterans with specific service-related impairments. The level of exemption is determined by the severity of the condition.
To learn more about the various exemptions available, you can consult your local assessor's office or visit their website.
With a high quality of life, a steady job market, and a booming economy, there are a few reasons not to live in Nebraska. However, it's important to keep in mind that the state has some of the highest tax rates, so staying on top of things is important as a homeowner, property manager, or investor.
Be sure to visit your local assessor's office or view the website to learn more about the current legislature, file appeals, or learn more about property tax calculations in your county or city. The Douglas County assessor's website, for example, has great resources you can use to navigate your property taxes.
By remaining up to date with your property taxes, you can ensure that you avoid severe penalties and retain ownership of your home.