Property taxes can be a significant portion of your monthly house payment, yet most people are painfully unaware of the ins and outs of property taxes and are happy to just be able to pay the bill each month. When you’re looking to buy a home, the property tax information is available on most real estate websites, but that information is not always accurate. Although the information listed about property taxes may have been the amount paid in the previous year, property taxes are calculated according to the value of the property. These are calculated yearly, and generally, when you buy a home the sale price is considered to be the assessed value. The issue is that there are state laws that only allow the property value to be assessed at a small increase each year, so if the home hasn’t been sold in a long time, the home may have appreciated more than the assessed value shows, in which case a buyer’s property taxes can be much higher than the current taxes. Of course, if the home has depreciated, this can mean your taxes are much lower. On top of that, there are also lots of different tax exemptions that you or the previous owner may or may not be eligible for, so if you’re eligible for a different amount of tax breaks, that’s another reason that your property taxes will end up being higher (or lower) than the previously paid amount.
To best estimate what your taxes may be ask your realtor and/or mortgage broker to help you find out what the tax rate will be in the areas you are looking at then multiply your estimated purchase price by that rate. Just keep in mind that this is only an estimate and that laws, assessment rates, and values can all change in the future.
Although it is difficult (or impossible!) to know exactly what your property taxes will be, these tips should help you be able to estimate more accurately than the tax history you find on a real estate website. Happy house hunting!
Thinking of buying or selling a home in Sussex County? Give us a call at Cooper Realty Associates and put us to work for you – 302-644-2266.