The Bottom Line

For many homeowners, the mortgage is their biggest single income tax deduction.

Property taxes are assessed on the latest property values.

Escrowed property taxes can add more money to your monthly mortgage payment.

Did you know?

Taxes paid by the seller are only relevant to you for the first year you own your new home.

 

Property Taxes and Home Ownership

How Taxes Affect Home Ownership

Home ownership can be a great financial investment. Most homeowners are delighted to find that their home is their biggest single income tax deduction.

But before you can deduct them, you have to pay them. Escrowed property taxes can add more money to your monthly mortgage payment.

As you view homes for sale, ask us to calculate the average cost of property taxes in your new neighborhood. The reason is that taxes are assessed on the latest property values.

The taxes paid by the seller are only relevant to you for the first year you own your new home. The property taxes are based on what the seller paid, but when you purchase the home, you will establish a new market value.  

Use caution. Before you buy, estimate your monthly mortgage payment including the property tax assessment you’re likely to receive next year. That will help you determine how affordable the home you’re buying will be on a monthly basis.