you buy and own a home, your local government (typically through
what is called a County Tax Collector's office) sends you an annual
or semi-annual, lump-sum bill for property taxes. Receiving this
bill and paying it are never much fun because most communities bill
you just once or twice per year.
taxes are typically based on the value of a property. Although an
average property tax rate is about 1.5 percent of the purchase price
of the property per year, you should understand what the exact rate
is in your area. You can call the Tax Collector's office in the
town where you're contemplating buying a home and ask what the property
tax rate is and what additional fees and assessments may apply.
current owner's taxes may very well be based upon an outdated and
much lower property valuation. Real estate listings may contain
information as to what the current property owner is paying in taxes.
Your property taxes (if you buy the home) will probably be recalculated
based upon the price you paid for the property.
you make a small down payment (typically defined as less than 20
percent of the purchase price), many lenders insist upon property
tax and insurance impound accounts. These accounts require you to
pay your property taxes and insurance to the lender each month along
with your mortgage payment.
Next Step: Tax Benefits of Ownership
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