Jeni VanOrnum | Real Estate Insights & Education

Property taxes are a significant ongoing expense that many first-time buyers underestimate. Here’s what you need to understand.

How Property Taxes Work

Local governments assess your property’s value and apply a tax rate (mill rate) to fund schools, police, fire departments, roads, and other services.

Calculating Your Tax Bill

Property Tax = (Assessed Value × Tax Rate) / 1,000

If your home is assessed at $300,000 and the tax rate is 20 mills (2%), your annual tax would be $6,000, or $500 monthly.

Assessed Value vs. Purchase Price

These often differ. Some jurisdictions reassess upon sale, while others have set reassessment schedules. Ask about reassessment timing when considering a purchase.

Factors Affecting Property Tax

• Location (rates vary significantly by municipality)
• Property type and size
• Local budget needs
• State laws and tax caps

How Property Taxes Are Paid

Most mortgages include taxes in your monthly payment. The lender holds funds in escrow and pays the tax bill when due.

Tax Exemptions and Deductions

Many areas offer:

• Homestead exemptions
• Senior citizen exemptions
• Veteran exemptions
• Federal mortgage interest deduction

Property Tax Appeals

If you believe your assessment is too high, you can appeal. Compare your assessment to similar properties and present evidence.

Budget Accordingly

When house hunting, always check property tax rates. A cheaper home in a high-tax area might cost more than a pricier home in a low-tax area.

I’ll Help You Understand

When showing you properties, I provide tax information so you can make informed budget decisions.