| 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. Most likely, however, you
will have to go through a formal tax-appeal process,
which begins 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 or find comparable sales information
available on various real estate Internet sites.
|
|
| Q:
|
Are
taxes on second homes deductible? |
| A:
|
Mortgage 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. |
|
