Real estate taxes
These are money paid on the value of properties, it’s also called ad valorem. The local government in the location of this property takes full responsibility in the levied of this tax by the jurisdiction of that municipality. This tax should not be confused with the rent tax (it depends on the rental income while the property tax depends on the value of the property).
However, it does not only depend on real estate values also on the value of the transaction ( sales of property). Never the less we can also see it when a property is been inherited (inheritance tax) which is paid annually. Ad valorem has two major components: building and that land (site value) value.
Statistics have shown that homeowners’ taxable value is always half the value of their home. Say you pay 500k for a house, it can be seen clearly that your taxable value is 250k. Like in the case of homeowners insurance, real estate taxes can be paid monthly in an escrow account set by our lender and it will be paid on your behalf when they are needed.
Real estate taxes are sometimes a great problem for a homeowner, they tend to increase steadily over time even after you have paid off your mortgage. However, they are some ways to lower this burden.
- Get a copy of your property tax card
It is very important for homeowners to request a copy of their property tax card and study it so as to deny any fraudulent addition on the property. This card embodies the actual dimension of the rooms and the number, types of fixtures located within the house. Not only that it also carries information on the type of features and improvements made over time. Having a good mastery of this card, homeowners can report any discrepancy made during the assessment to the tax assessor which can be corrected and hence reduced the burden.
- Don’t Build
Ad valorem, as seen above depends on the value of the property. So any attempt to establish a new site or structural change will automatically lead to an increment of your tax bill, but if need be, call the attention of your local tax department to have a gross estimate of any new structure.
- Join the assessor in the assessing process
Many homeowners allow the assessor to assess their home unguided. Here information gathered is not valid because the assessor has little knowledge about these features hence will minimize the fact that many of these features are outdated so as a remedy to this, homeowners should be present in the assessing process to point out those outdated appliances as well as the good once