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.
