New property owners might wonder, "Do you have to pay property taxes forever?" Unfortunately, the answer is yes - you still need to pay for community and municipal services through taxes even after paying off your mortgage. However, there are ways you can potentially reduce your property tax bill and ease the burden of ongoing costs.
To help you understand a bit more about property taxes, here are some of the basic facts to know:
Many renovations and upgrades increase the overall value of your property, which in turn can increase your property taxes. The changes you can expect to increase your bill include:
Tax cards allow homeowners access to information about what the town has collected about the property. The cards contain data on the size and precise dimensions of the property, as well as the size and types of furnishings in your property.
Other documents may contain sections describing special features and notations about improvements to existing structures. Take note that the card may have a number of errors; bring them to your tax assessor for further consideration and investigation of the matter.
Property taxes are determined by two important variables: tax rates and current market values. Cities, counties and states can all have different tax rates, and some municipalities change their rates every year.
If you are concerned you are paying too much, investigate your local government's process for appealing your bill. The more familiar you are with your property tax bill, the easier you'll be able to spot any potential issues.
While the tax rates are determined by local governments, there are some ways individual homeowners can reduce their property taxes. One of the simplest ways is to limit the amount and scope of your home improvement projects. Consider the impact each potential improvement will have on your property value and adjust your plans accordingly.
Another way to reduce your property taxes is through exemptions. There are tax exemptions available for homesteaders, seniors, veterans and some types of agricultural property. To potentially save a bundle, investigate whether your property might be eligible for an exemption.
While you do have to pay them forever, better understanding property taxes helps you make better financial decisions as a homeowner.
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Pam is a top-ranking real estate broker with 40 years sales experience. Pam’s 30 years in real estate includes co-owning and operating Century 21 Carriage House (aka Century 21 Minuteman). Prior to selling real estate, Pam sold computers for the Hewlett-Packard Company. In addition to an MBA, Pam earned her Juris Doctor degree from Suffolk University Law School and is admitted to the Massachusetts Bar.
Pam offers her clients a level of expertise rarely found in real estate because of her background, education, and experience. She is now accepting new clients.
