Things You Should Know about Property Taxes

Paying for the right amount of property tax is the duty of every homeowner. Many government facilities and programs rely heavily on funding from tax collection for maintenance and operation. It is important that when you buy a house, you also know how much property tax you need to pay. Tax collection varies by state and by local tax jurisdiction. 

Here are the things that you need to know about property taxes: 

  1. You can face a lawsuit if you will not pay it.

You probably know this already but this is just to reiterate the importance of paying your tax correctly and on time. The penalties may vary by state and the gravity of the offense. The worst thing that can happen if you fail to pay the property tax is to lose your house to foreclosure. 

  1. Paying taxes through your credit card can be allowed

Some areas permit credit card payment for property taxes. Normally, this is being done by a third party to help facilitate the payment. But considering that the credit card payment incurs interest when not paid on time, this is not a practical option. 

  1. You can deduct your property taxes from your federal income tax return

On a positive note, you can deduct what you paid in property taxes for the entire year on your federal income tax return. This means that you will be paying less on your tax return and can even make you qualify for a tax refund if you will pay taxes before the deadline. 

  1. You may qualify for tax exemption

Any tax exemption is welcome, especially if you are still paying a monthly mortgage on your property. To check your eligibility for tax exemption, contact your local tax assessor. Each state has several qualification guidelines before granting the exemption to the taxpayers.  Military veterans are often granted the exemption. Residents of Smithtown, New York can qualify once they build or renovate a home for a grandparent. 

  1. Get an estimate of your property taxes before buying it

One of the biggest mistakes homeowners do when buying a property is not anticipating the amount of tax that they are going to pay. This puts them into a financial dilemma especially if they only have enough to pay for the monthly mortgage plus other expenses. The amount of property tax to be paid varies city to city and state to state.  There are free tax calculators online but to be more accurate, ask your Denver real estate agent and the local tax assessor’s office how to compute for property taxes.