Buying Your Home - Property Taxes
How do property taxes work?
Property taxes are what most
homeowners in the United States pay for the privilege of owning a piece of real
estate, on average they are about 1.25 to 1.65 percent of the property's assessed value per year. Property taxes usually include local tax assessments. These
annual local assessments by county or local authorities help pay for public
services, such as schools, police stations, etc., and are calculated using a variety of formulas.
Are property taxes deductible?
Property taxes on all
real estate, including those levied by state and local governments and school
districts, are fully deductible against current income taxes.
Mortgage interest on a 2nd home, however, is deductible only if you itemize. Check with your
accountant or tax adviser for specifics.
can I learn about appealing the assessed value of my property?
Sometimes, the assessed value is different than the current market value. If you notice that the assessed value on your home is too high, contact your local
tax assessor's office to see what procedures to follow to appeal your property
tax assessment. You may be able to appeal your assessment informally. Most
likely, however, you will have to go through a formal tax-appeal processes,
which begins with an appeal filed with the appropriate assessment appeals
What is an
An impound account is a trust account established by the
lender to hold money to pay for real estate taxes, mortgage insurance and homeowners
insurance premiums as they are received each month.
Do all loans require impound
If you are taking out an FHA or VA loan, the lender can require
an impound account to pay real estate taxes and hazard insurance premiums, as
with a standard loan. Most conventional loans do not require an impound