| Q: |
How do property taxes work? |
| A: |
Property taxes are what
most homeowners in the United States pay for the privilege of owning a
piece of real estate, on average 1.5 percent of the property's current
market value. These annual local assessments by county or local
authorities help pay for public services and are calculated using a
variety of formulas. |
|
| Q: |
Are property taxes deductible? |
| A: |
Property taxes on all real
estate, including those levied by state and local governments and school
districts, are fully deductible against current income taxes. |
|
| Q: |
Where can I learn more about appealing
my property taxes? |
| A: |
Contact your local tax
assessor's office to see what procedures to follow to appeal your
property tax assessment. You may be able to appeal your assessment
informally. Mostly likely, however, you will have to go through a formal
tax-appeal processes, which begin with an appeal filed with the
appropriate assessment appeals board. |
|
| Q: |
How is a home's value determined? |
| A: |
You have several ways to
determine the value of a home.
An appraisal is a professional estimate of a
property's market value, based on recent sales of comparable properties,
location, square footage and construction quality. This service varies
in cost depending on the price of the home. On average, an appraisal
costs about $300 for a $250,000 house.
A comparative market analysis is an informal estimate
of market value performed by a real estate agent based on similar sales
and property attributes. Most agents offer free analyses in the hopes of
winning your business.
You also can get a comparable sales report for a fee
from private companies that specialize in real estate data. You also can
find comparable sales information available on various real estate
Internet sites.
|
|
| Q: |
Are taxes on second homes deductible? |
| A: |
Interest and property
taxes are deductible on a second home if you itemize. Check with your
accountant or tax adviser for specifics. |
|
| Q: |
What is an impound account? |
| A: |
An impound account is a
trust account established by the lender to hold money to pay for real
estate taxes, and mortgage and homeowners insurance premiums as they are
received each month. |
|
| Q: |
Do all loans require impound accounts? |
| A: |
If you are taking out a
FHA or VA loan, the lender can require an impound account to pay real
estate taxes and hazard insurance premiums, as with a standard loan.
Most conventional loans do not require an impound account. |
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