Buying a home is one of the biggest investments for most people, but it’s not just the initial purchase price that you have to worry about. You also need to be aware of the property taxes that come with owning a home. Property taxes are based on the value of your home and the land that it sits on, and they can vary significantly depending on where you live. Here’s what you need to know about property taxes before buying a home.
Property taxes are a recurring expense
Property taxes are due every year, so you need to make sure that you can afford to pay them. The amount of property taxes you pay is calculated based on the value of your home and the land it sits on. If the value of your home increases, your property taxes will likely go up as well. On the other hand, if the value of your home decreases, your property taxes may go down.
Property tax rates can vary greatly by location
Property tax rates vary by state and even by municipality. States with no income tax may have higher property tax rates, and vice versa. For example, New Jersey has some of the highest property taxes in the country, while Hawaii has some of the lowest. Even within a state, property tax rates can vary by city or county. It’s important to research the property tax rates in the area where you’re considering buying a home.
Property taxes help fund local services
Property taxes are used to fund local government services, such as schools, public safety, and transportation infrastructure. The amount of property taxes you pay can also depend on the level of services provided in your area. For example, if your city has a high level of public services, your property taxes may be higher than in a neighboring city with fewer services.
You can appeal your property tax assessment
If you feel that your property tax assessment is too high, you can appeal it. You’ll need to provide evidence that your home’s value is lower than the assessed value. This can include recent home sales in your area, an appraisal, or a comparison of your home to similar homes in the area. The appeals process varies by state and municipality, so you’ll need to research the process in your area.
Property taxes are an important consideration when buying a home. You need to take into account the amount of property taxes you’ll need to pay each year, as well as the rates in your area. By doing your research ahead of time, you can make informed decisions about buying a home that fits within your budget and your long-term financial goals.