Most people are familiar with income taxes, but if you are buying your first home or piece of property, you may not know what property taxes are all about. Anyone who is considering buying property should have a basic understanding of these taxes.
In colonial days taxes were raised for the benefit of the King. In modern times, they are raised to contribute toward our federal, state and local government expenses. Real estate property taxes are a stable source of revenue that the county uses to pay for the general upkeep of our community, its services, infrastructure, and various public programs. They help pay for the vision of Currituck County as it moves forward to improve residents’ quality of life in the community. Without these taxes our local government would have a very difficult time funding administration, fire services, public safety, education, and economic development. In Currituck County, a majority of general revenue comes from the tax assessment of real estate, as well as personal property and motor vehicles.
(Currituck County 2011-2012 Annual Operating Budget: www.currituckgovernment.com.)
Another term for real estate tax is Ad Valorem tax, a Latin phrase meaning, in proportion to value. Each property owner pays tax on the market value of their land and buildings based on the calculations of an Assessor. At this time, Currituck County is wrapping up the process of valuing properties for the effective tax year 2013. Every eight years, the State of North Carolina requires counties to go through this assessment, but some counties may elect to revalue more frequently. The last general revaluation for Currituck County was in 2005. The new assessed value of a property will be the market value assigned by the assessor at the January 2013 valuation, and is a public record. It is not the same as a private Appraised Property Value Report done by a licensed real estate appraiser to determine current true market value. Fortunately, those granite counter tops don’t make a difference to the tax assessor in this calculation like they do with an appraiser.
The assessed value is used to calculate the annual taxes for each of the following eight years. For example, real estate assessed at the market value of $100,000 would be taxed at the current county rate of .32 per $100 value, resulting in a tax bill to the owner of $320 (100,000/100 x .32 = 320). Some areas of our community have additional taxes and charges to pay for water/sewage, animal taxes, etc., which affect the total tax bill. Neighboring Camden County has a tax rate of .59 per $100 value, making that same example of a $100,000 house produce a tax bill of $590. It is good to know that the residents of Currituck County enjoy the sixth lowest overall tax rate in all of North Carolina’s 100 counties, which has remained steady since the 2003-2004 tax year.
Once the property tax bill comes, and it will come, it is due September 1st of each year. Taxpayers have until January 5th to pay without interest or penalty.
When closing the sale of a home, a buyer will usually have to pay some for property taxes. The buyer doesn’t pay the government because the government has
already collected its money on the property from the previous homeowner - the seller, for the current tax year. The seller collects the buyer’s prorated property tax payment as reimbursement for the months the buyer will own in that year.
If you are new to purchasing real estate, the challenges of first-time home buying can seem daunting. As your REALTOR®, I can guide you through this process and help make the entire experience much easier. Contact me for a consultation.
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