What Home Buyers Need To Know About Property Taxes

‍
Property taxes are taxes that homeowners pay each year to the city where the house is located. The money from property taxes goes to pay for things like road maintenance, schools, and fire and police services. Every homeowner pays property taxes. The amount of taxes that a homeowner pays is based on the assessed value of the home. The assessed value of the house is often lower than the appraised value of the home, which is good for homeowners because it means they will pay less tax.

‍
One of the biggest mistakes that first-time homebuyers make is not figuring the property taxes into their monthly housing costs, according to a real estate lawyer CT. The cost of the property taxes should be combined with the value of your mortgage to determine if a house is affordable for you or not. Often first-time home buyers only think about the actual mortgage payment when they are figuring out their monthly housing costs. But a real estate lawyer CT will tell all first-time buyers to add the cost of those property taxes to the price of the monthly mortgage payment along with insurance and other fees to see if a home is affordable.

‍
Figuring Out Property Taxes

‍
In order to figure out what the property tax cost will be for any particular home, all you need to know is the current tax rate in that area and the assessed value of the house. The assessed value of the home is not the appraised value of the home. Ask your real estate lawyer CT if you have questions about the difference between the assessed value of the house and the estimated value of the home. In order to get the current tax rate, you multiply the assessed value of the home by the current tax rate. Then divide that by 12 so that you can pay the taxes monthly.

‍
An excellent example of this is given by a real estate lawyer CT using a home in Fairfield County. Assuming a home's assessed value is $160,000 the tax rate for that home in Fairfield County would be about $2080, or an additional $174 per month on top of the cost of the mortgage. That makes a big difference for homebuyers when it comes to figuring out whether or not a home will fit their budget.

‍
Property Taxes Change

‍
Another factor that homebuyers should consider when buying a home is that the property taxes will change over time. The property tax may decrease, but more likely, it will increase. So homebuyers who are looking at home at the very top of their price range could get hit by a property tax increase that makes their home unaffordable later on. First time home buyers should be sure to ask questions about local property taxes when they are looking at potential properties to buy. An experienced real estate lawyer CT will be able to steer first-time homebuyers towards properties that are within their budget even after the cost of the property taxes is taken into consideration.

‍