Understanding Property Taxes: Key Questions to Ask When Buying a Home

When purchasing a home, it’s crucial to have a clear understanding of the property’s tax situation. Property taxes can significantly impact your overall housing costs, so it’s essential to ask the right questions. At Thompson Kane & Company, our experienced loan officers are here to support you with property tax questions, ensuring you make an informed decision.

Here are 5 tips to help you on your journey, including how Thompson Kane & Company can assist you every step of the way:

1. What is the Assessed Value of the Property?

The assessed value of a property is often less than its market value. This figure is used to calculate property taxes. To determine the assessed value, ask for a recent copy of the seller’s tax bill. This document will provide you with the necessary information to understand the current tax situation of the property.

2. How Often are Properties Reassessed and When was the Last Reassessment?
Property taxes can increase significantly during reassessment periods. Knowing how often properties are reassessed and the date of the last reassessment can help you anticipate potential tax hikes. This information is crucial, especially if a reassessment is imminent, as it may affect your future tax obligations.

3. Will the Sale of the Property Trigger a Tax Increase?
In many areas, the sale of a property can lead to an increase in its assessed value based on the purchase price. This, in turn, can result in higher property taxes. For instance, in California, property taxes may remain relatively stable until the property is resold, at which point they could increase based on the new sale price. It’s important to understand how this might apply to the property you are considering. The tax bill for a home you buy may be a lot higher than what the previous owners last paid!

4. Is the Amount of Taxes Paid Comparable to Other Properties in the Area?
Comparing the tax amount paid on the property with similar properties in the area can reveal discrepancies. If you find that the taxes on the property are unusually high, it might be possible to appeal the tax assessment and have the rate lowered. This could save you money in the long run. The window of opportunity to appeal is typically brief, so don’t procrastinate.

5. Does the Current Tax Bill Reflect Any Special Exemptions?
Many tax districts offer exemptions or reductions for certain groups, such as senior citizens aged 65 or over. If the current tax bill includes such exemptions that you do not qualify for, your future tax liability could be higher. Make sure to identify any special exemptions and understand how they might change once you take ownership of the property.

How Thompson Kane & Company Can Help
Navigating property taxes can be complex, but you don’t have to do it alone. Your Thompson Kane loan officer can help you identify all the factors you need to consider regarding property taxes. We provide personalized guidance and support to ensure you fully understand the financial implications of your home purchase. With our expertise, you can make informed decisions and avoid unexpected surprises. Your realtor is another key resource for getting a complete picture of a home’s tax situation.