Property taxes are a part of homeownership. In many communities, property taxes are an important source of revenue that pay for services like schools and roads. While property taxes themselves are somewhat ubiquitous, homeowners can have different experiences with property taxes.
The amount paid varies by house and the rate varies by community. In addition, some homeowners pay for their property taxes when they make their monthly mortgage payment as part of a conventional mortgage. Others must pay their property taxes separately.
It's hard to know what to expect when you're buying your first home, but it's important to be prepared for property taxes. Property taxes must be paid, or a lien could be placed on the home. If you're buying your first home and aren't familiar with how property taxes work, here's what you need to know.
How Much Are Property Taxes?
Each homeowner will have to pay a different amount for their property taxes based on their home's value. In order to determine how much the property owner must pay, a local government official will assign a value to the home. This value is known as the assessed value. Property taxes are calculated as a percentage of the assessed value.
The assessed value of the home can change over time, as the house and neighborhoods change. Some communities reassess value regularly, while other communities wait until an event like a home sale takes place.
What influences the assessed value? Many factors:
- Number of bedrooms
- Home size, property size
- Age of the home
- Neighborhood and location
- Recent renovations and upgrades
- Construction material
- Construction type
In some communities, the home's value is reassessed when a permit is pulled for a major remodel of the home. In particular, adding a room or a structure to the property can trigger a reassessment of the home's value, which can lead to bigger tax bills.
Homeowners should take this kind of expense into consideration when budgeting for a major home improvement. The best way to find out approximately how much their home's value will increase is by calling the assessor's office.
What Happens If Your Property Taxes are Paid Late?
Property taxes are important to many communities because they pay for so many critical services. A late payment on a bill can be a big problem, if it is very delinquent.
In many communities, a slightly late property tax bill will lead to a slightly higher bill when interest is added to the amount due. Some communities will add an administrative fee or a penalty. If the bill is very delinquent, the assessor's office may file a lien on the property, or foreclose.
Homeowners who are unable to pay their property tax bill should not hide from the assessor's office. Many communities have payment programs and will work with homeowners to help them get caught up and stay caught up.
How are Property Taxes Paid?
Some homeowners pay for their property taxes with their monthly mortgage payment. The mortgage lender establishes an escrow account for the property owner, and money is added to the account monthly. When the property tax bill comes due, the amount collected is sent to the lender.
The amount due may vary, since the home can be reassessed at various times. If the lender overestimates how much is due for property taxes, the homeowner is refunded the excess. If the lender underestimates the amount due, the homeowner must pay more, and the amount the homeowner pays monthly is increased as well.
Homeowners who are not set up to pay their property taxes through their lenders must save up their money and pay property taxes when the bill arrives. Most property taxes are due once or twice a year. Due dates vary by community.
Does Everyone Have to Pay Property Taxes?
Everyone must pay property taxes unless there are some exemptions. However, even with exemptions, this usually does not eliminate the full property tax amounts. Who is considered exempt depends on the state, so anyone who moves to a new state should find out if they have an exemption by contacting their local assessor's office. Some common exemptions include:
- Seniors over a certain age
- Veterans or disabled veterans
- Homes with certain energy upgrades
- Disabled homeowners
Anyone who is thinking about moving to a state to take advantage of their property tax exemptions should contact the tax assessor's office in that state before making their final decision. Sometimes exemption qualifications are complicated, so it's important to verify before relocating.
How Can You Budget for Property Taxes When Buying a Home?
Property taxes can be thousands of dollars each year, so for many homeowners, these taxes represent a major expense. It's important to budget for property taxes before buying a Crieve Hall home, to ensure the property taxes are affordable. To find out how much the property taxes will be, the home buyer should contact the assessor's office in the location where they are trying to buy.
Budgeting helps ensure that the home buying and homeownership process will go smoothly. For more information about buying a home and budgeting for the experience, talk to an experienced real estate professional today.