A property tax is a tax that a government assesses on land, such as real estate, or machines and tools that a business uses. The Washington State Department of Revenue website states that tax authorities usually do not require property taxes on tools unless the owner uses them while operating a business. Property taxes increase if real estate becomes more valuable or the government raises tax rates.
Property taxes can increase if the owner makes improvements to a property. An empty plot of land with no houses or businesses on it is not as valuable as a property where the owner has installed valuable equipment and structures. The owner should consider the effect of property taxes when paving roads, hooking up water or sewer lines or connecting to the electric grid, since these actions increase the value of the land.
To determine the value of the land, the county hires an assessor to measure its value. County law specifies how often the assessor must calculate the value of each plot of land, such as once a year or once every four years, as well as how often the assessor must personally visit the real estate. According to the Washington State Department of Revenue, the property tax can increase by a higher percentage than the increase in the value of the real estate.
Real estate markets affect the current value of the land. If a location suddenly becomes popular, the land value may increase even if the owner does not make any improvements. This can increase the property taxes that the owner must pay substantially. Laws such as California's Proposition 13 can limit the increase. This law restricts property tax increases to a maximum of 1 percent per year, regardless of the gain in land value.
Improvements that a neighbor makes to property can also increase land value. If a large employer suddenly opens up a factory or office building near a plot of real estate, or a new university or college opens, the land becomes more valuable. The property owner may want to ask a city to block a major development because it will increase property taxes, forcing the owner to sell a farm or business.
A state may also have a special bond issue or levy that increases property taxes. This is usually for a purpose such as providing additional funds to the public school system or improving the infrastructure in the area. Residents often have the chance to vote on a special property tax assessment, and it may require the approval of more than 50 percent of voters to pass.
Eric Novinson has written articles on Daily Kos, his own blog and various other websites since 2006. He holds a Bachelor of Science in business administration from Humboldt State University.