When looking into buying a new home, property taxes should be a factor in your decision.
There are taxes associated with owning real estate, whether it be a home or a plot of land. How much these taxes are depends on multiple circumstances, including how you use it, its condition, size, and more.
How a locality determines property value differs by state, city, and township, but this is how real estate taxes are defined.
If you are looking to move in order to lower your homeownership costs, including taxes, there are some things to consider regarding how real estate taxes might factor in.
Define Your Ideal Location
Many home buyers are surprised to find the difference between property tax rates for two similar houses, maybe just a mile apart. Factors like county, city or neighborhood lines in between create differences in the way tax funds are allocated to the local public schools and other entities.
This makes it critical for you to understand how much you’ll be spending on property taxes in your new home. Decide early on in the process on specific cities or suburbs you’d like to live in. Ask your local licensed agent to pull property tax information so you’re not surprised when that first bill hits your mailbox.
Questions? A local licensed agent or financial adviser can help you navigate how taxes might differ from town to town, or they may have advice on how you can find a home that fits your needs without breaking the bank when it comes to paying taxes.
Fixer Upper Versus Buying New
When moving, you should weigh the pros and cons of buying something brand new versus taking on a project that may require a little elbow grease to fix up. Buying and renovating an old house with lower real estate taxes could save you big bucks compared to buying a new home on a comparable plot of land. Why? Because new construction is often assessed at a higher value than a similar existing property. If you don’t move walls or add to the footprint of your home during renovation, the permitted work likely won’t require a new tax assessment by the county or city. This can help you reap the benefits of a newly renovated home without overpaying taxes.
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