It's the annual cost that might surprise you - property taxes. Every real estate property - including land and buildings - is taxed by state and federal governments.
What is property tax money used for?
Your community benefits from property taxes collected. Public services such as emergency services, recreation, education, and transportation are all funded in part by property taxes.
How are properties assessed?
The amount of property tax you are asked to pay is a percentage of the value of your property. The county assessor evaluates any improvements you've made to the property and considers the local real estate market value to arrive at the assessable value of your property.
Can the property tax change from year to year?
Yes. If the property tax rate changes or the value of your property changes, your tax will increase or decrease accordingly.
How are property tax rates set?
Because funds generated from property taxes are used in various government works, there are several councils and boards that meet to decide how much money is needed.
How can I pay my property taxes?
You have two options. One is that you can simply plan ahead and pay the full balance each year. The second is applicable if you have a mortgage on your property. Your mortgage company can set up an escrow account that you deposit money into each month, and they will pay the property tax balance at the end of the year. With this option, the extra funds that belong in escrow are paid each month with your mortgage payment.
Property taxes can be alarming for some property owners, but if you learn how much you can expect to pay and plan ahead, you won't be caught off guard.
Do you have any advice for new homeowners? We would love to hear your comments!