What You Need to Know About Personal Property Taxes

                                             What You Need to Know About Personal Property Taxes

Personal property taxes can be another unexpected cost when buying a new home. If you're still renting, you might not be familiar with how personal property taxes work. Below, you'll find some useful information on what personal property taxes are, how much you might expect to pay, and why they're something you should be aware of.

When you buy and own your own home, your local government will send you an annual, semi-annual, or lump-sum bill for personal property taxes. These statements usually originate from the County Tax Collector's Office, though it may be different where you live.

Getting this bill in the mail is never fun because most locations will bill you only once or twice per year, so your payments aren't nicely spread out in more manageable sums over the course of the year. Most property taxes are based on the total value of the property you own. An average property tax rate is around 1.5 percent of the purchase price of the property per year, but you should take the time to find out how much your local government charges. To find out, simply call the Tax Collector's Office in the location where you're planning on buying and ask for the property tax rate is and if there are additional fees and assessments.

You might be tempted to simply ask the current owner of the property what they pay in personal property each year. You may or may not receive accurate information, as many governments continue to tax long-time owners of property based upon an outdated and far lower property valuation. When you purchase a home from someone else, your property taxes will probably be recalculated by the city based upon the current purchase price of the home.

If you choose to purchase a home and make a small down payment of less than 20 percent of the overall purchase price, your lender might insist on property tax and insurance impound accounts, which require that you pay personal property taxes and insurance to your lender every month with your mortgage payment and PMI.

Personal property tax is only one of those costs you'll want to think about when purchasing a home. We'll help you figure out how much money you should budget for when contemplating the purchase of a new home. For more information, please contact us today!    

  StephAntes@OurHome4You.com    or   RickMcDeid@OurHome4You.com