Understanding Property Taxes – For First Time Home Buyers

Buying your first home can seem like a very big task when you look at everything that is involved with it. When it comes to searching and buying a home, many home buyers forget about one particular thing; taxes. There are several taxes that you should be aware of when you plan on buying a home.  

Standard Property Tax

Regular property taxes are the main tax that many may already know about. Usually these taxes are derived from the county or local government of the area. You can do a little bit of research ahead of time to prepare yourself for what your property tax may be.  

Prorated Tax

Prepaid property tax is one that not many home buyers are informed about. These can sometimes come up during the closing process on a home. These are taxes that are paid ahead of time and are prorated. As stated above, the tax amounts will reflect what is averaged in certain cities, or by local governments.  

Sales Tax

Property sales tax is a common term for the home buying process. This is something that needs to be researched because not all states require home buyers to pay sales tax on their home. This is especially important for those who will have to add this into their budget.  

Deductions

Paying taxes with a home is more than just putting your money out there with no return. For example, if you will have to pay sales tax on your home, you can get some return from this. This means that you can claim both federal and state deductions on your property taxes.  

Conclusion

As a responsible home owner it's important to prepare for tax payments the same as you would your mortgage and other housing expenses. So, dot your “i”s and cross your “t”s and your tax payments should go smoothly. Don't forget to ask about tax benefits from being a homeowner and a list of deductions you may be eligible for, keep your receipts for the end of each year just in case.