ResalesHow Much Are The Taxes?
It"s a question every house-hunter asks when it looks as
if the property being inspected just might be The Right One.
And the answer isn"t as simple as it may seem.
The matter can be particularly confusing to the buyer of a
brand-new house. Often the present property tax is based on
an assessment figure set while the building lot was still
vacant land. Assessment rolls are closed months in advance of
the next tax year.
In a state where taxes are paid in arrears (the opposite
of in advance) it could be a couple of years before the new
house is assessed at its real value and then billed for its
fair share of property taxes. This can come as a real shock
to the homeowner, especially if a mortgage company writes to
say there"s nowhere near enough money in the escrow account to pay
the next tax bill.
In an area where assessments are automatically re-set at
sale prices, the prudent buyer will calculate how much the tax
bill will eventually ask for. Elsewhere, it"s worth stopping
in at the assessor"s office and asking for a rough estimate of
what the tax is likely to come to, when all the dust has
cleared.
The buyer of an older home also needs to investigate the
tax figure that"s quoted in the listing information. It"s
worth checking whether the present owner has some exemption
that makes the tax figure lower than it would be to the next
owner. State laws vary, but in some areas senior citizens, or
seniors on low incomes may have favorable tax treatment. Some
states offer veterans partial tax exemption. Tax incentives
may be offered to encourage certain agricultural purposes,
historic preservation, industry, or other uses.
It"s even possible to find the present owner being taxed
for more than the real tax figure. In some areas, unpaid
water bills, for example, might be added to the property tax
bill. Again, the matter should be investigated beforehand.
What the prudent buyer is seeking is known as the "true
tax" figure, not the amount the nearby church pays while the
minister lives in the property. Yes, a diligent real estate
agent should check with the taxing authorities when the
property goes on the market.
Double-checking, though, could avoid some unpleasant
surprises down the line.
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Tax Breaks for Selling Your Home: Read the Fine Print