The Lottery And Your Property Taxes
Property taxes in some states come with a lottery tax reduction. This is because the state and the lottery have a deal that states that so much of the money spend on lottery tickets minus the winnings pay out is to be used to reduce the property tax of the property owners in the state. Some years, you may see forty dollars and another year you might see ninety dollars. The amount is determined by how many property owners there are and how much profit was made by the lottery. This also weights heavily on the type of property you have as well.
Whether you play the lottery or not, you are still entitled to a lottery tax credit. This does help lower the property tax, but it is not something you can rely on every year. You might see a ten-dollar lottery credit one year and the previous year it may have been eighty dollars. Since you expected another good year, you have to add to your property tax payments out of your pocket. Now when the credit is substantial, you can pocket that money. Mortgage lenders do not plan your tax escrow to include or exclude lottery credits. The reason is that it is not a guaranteed amount or even guaranteed that there will be one in any given year.
Every state has different amounts. Just as with life, not everyone in every state plays the lottery as in another state. Your neighboring state to the west may give their property tax payers two hundred dollars this year, while you will only see twenty dollars. It all depends on the states yearly sales and profit. The state to the west may have a higher gambling rate than the people that live in your state. This is why mortgage lenders do not rely on lottery credits when establishing your property tax payments every month.
Lotteries can be great for property owners, but if you are one who gambles and spends a great deal of money on it, you may not come out ahead either way. Yes, some states do allow you to claim gambling losses up to a certain amount, you should also have winning amount. Therefore, this does not help someone who gambles. Many renters have raised objection to the lottery credit because they do not receive one and they are gambles as well. This will be an issue that will never go away. Not all people who gamble are homeowners and they still receive a credit, but you have to own a property to receive the credit, therefore, renters are not benefiting for any of their gambling.
This is hot topic in some communities where the lottery credit is given. If the tax laws and the state laws do not change to include everyone, then renters will never see a lottery credit. However, renters do have some tax benefits that homeowners are not allowed as well. Maybe it does equal out and maybe it does not, no one as ever tried to figure it out.