Property taxes can be tricky to navigate especially for first time homebuyers. If you forget to account for them, they may suddenly make your monthly payment go from affordable to unaffordable. Therefore, it is important to take into consideration the factors that determine what the property taxes will be. Here is a list of things that contribute to the price.
1. Location! It is no surprise that location pops up yet again, after all we are talking real estate! Taxes will vary from state to state, city to city and even within a city or town. For example, lake front properties will cost more than homes that are not on a lake.
2. Purchase price. The rate is set but you pay it based on what you purchase the property for. That means in this market where homes are selling for top dollar that you will likely pay more than the previous homeowners were paying.
3. Age of the home. New construction often has higher property taxes and the final amount is harder to calculate because the home has never been assessed. Work with your lender to secure your financing as best you can and if anything, estimate on the higher side just to be safe.
There is some good news though! When you purchase a home (aside from new construction) the taxes will be prorated for the year. In addition, taxes help support local schools, police and fire departments, road maintenance and more. All of things contribute to the embitterment of where you live!
