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Discussion Starter · #1 ·
DH and I are in the process of house hunting. We found an AWESOME home yesterday. It's so beautiful and a great price because it's out in the sticks. The houses closer to town are more expensive and have cheaper finishes and details. So, I'm dreaming of this one. Although I don't have an actual amount, I was looking at the property tax rates for the town and it's so high and when you add what i think the taxes will be, it makes the house unaffordable.<br><br>
I'm so sad <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/greensad.gif" style="border:0px solid;" title="greensad"> Bye bye beautiful home...
 

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<img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/greensad.gif" style="border:0px solid;" title="greensad"> I'm sorry! I know how frustrating it can be. BUT - the value of your dream home (sale price) may be very different from the tax assessment. You should go to the county's website and see how much the owner's paid in taxes last year. You can't figure the taxes based on what the seller is asking.<br><br>
In case you didn't already know, the tax rate is often <i>per $100</i> - not per $1. You should definitely look into it further before you totally write it off.
 

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All you do is look at the assessment of the house (not what it's selling for, but the assessment) and multiply that by the mill rate to get your taxes. So, for example one house we were looking at was selling for 204,900. It was assessed around 45,000 and the mil rate was 42.3-the taxes on that house were about $1800. Don't look at the average. A house a couple of streets over was listed at 169,900 assessed at 89,000 (and wasn't nearly as nice) and the taxes were about double.<br><br>
I hope this helps!
 

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Discussion Starter · #5 ·
THANKYOU <img alt="" class="inlineimg" src="/img/vbsmilies/smilies/loveeyes.gif" style="border:0px solid;" title="Loveeyes">:...you are making me feel better! I emailed our real estate lady to ask her to help me understand the tax thing. It is new construction (still being finished) so the taxes are 'to be determined'. If we decide to make an offer can we write a contingency regarding the taxes so if they are outrageous we can get out.
 

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Any contract you sign to purchase a house should include a due diligence period during which you can investigate various things about the house and you should be able to cancel the contract for any reason at all during that period and still get your deposit back. The due diligence period may also cover a contingency for financing or you may have a different time frame in which to obtain your financing. The taxes come under the financing part. Most mortgages require you to escrow taxes and insurance so when you make a payment it is PITI (Principal, Interest, Taxes, Insurance). When you do your financing process, your lender should look at your total monthly payment, not just the purchase price of the house, and can help you to understand what your payments will be.<br><br>
I don't know where you live. Here in Florida, it is very easy to find information about the assessed value of houses and tax rates. It is all on the web. In fact, if you know my full name and the county I live in, you could find my house and it would tell you a whole bunch of information including: what year my house was built, the last 3 or 4 dates it was sold and the sale price of each transaction, so this means you would know when I bought my house and how much I paid for it, the assessed price of the property, the fact that it is homestead property, how much value I pay taxes on, how taxes were for this house for the last several years, the size of the house, including the size of the garage separately from the house, and you could see an aerial picture of the house. There is no log on required to see any of this information -- it is freely accessible to the public.<br><br>
The mill rate is per $1000 of value. My mill rate is about 26 and we pay taxes on approximately $130,000 of value, so $130,000/1000*26 = $3380.<br><br>
Your real estate agent should definitely be able to help you find information on the mill rate and assessments in the area where you are looking and if you talk to a bank about financing, they should definitely be able to assist you because they will need the information in the financing process.
 

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Discussion Starter · #8 ·
Yes I have thought about insurance. Actually, I had realized about taxes but was just surprised by the tax rate in this town. It's a tiny little town with a tax rate 50% higher than what I currently have in the 'city'. So I was looking at the rates for the towns in the area and am really surprised by the huge variations. I'm trying to figure out what makes them vary so much. I expect my taxes to go up because we are significantly upgrading houses so the value will be more.<br><br>
So the towns assesment of property value is going to vary from the banks assessment- right?
 

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I know where I am from the tax rate in my town was a lot higher than anywhere else, partly because years ago the town chose to have their OWN school district rather than joining in with other local towns. Unfortunately this means that the tax rate is really high because it has to support an entire district, not just part of one. It's also high because they are raising money to start a proper fire dept instead of just a volunteer one.<br><br>
Anyway there are a lot of reasons property tax rates vary but that is just one example.
 

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Usually tax rates are higher in communities where property values are lower - that is how they make up the difference. It takes a certain amount of money to run things and places where the property values are high, they can afford to charge a lower tax rate. But in places where the tax base is very low, they need to charge a much higher rate.<br><br>
For example, the city of Detroit has a very high tax rate. Most of the houses are much less expensive there than they are in the suburbs, so they charge a higher tax rate to make up for the lower property tax base. If you have an average priced house, it usually isn't too bad, but if you buy one of the more expensive houses in the area it will really cost you. I had a friend who bought a MANSION in the city of Detroit, it was huge and only cost about $200K (this would have been a million dollar house elsewhere). He eventually had to sell it, since he was paying about $20K a year just in property taxes.
 

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Discussion Starter · #12 ·
Interesting<img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/smile.gif" style="border:0px solid;" title="smile"> I was trying to figure out why this itty bitty town was one of the highest rates. My agent is going to contact the town they are only open a few hours a week!) to get me an idea about the taxes on this house.
 

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<div style="font-style:italic;">Usually tax rates are higher in communities where property values are lower - that is how they make up the difference. It takes a certain amount of money to run things and places where the property values are high, they can afford to charge a lower tax rate. But in places where the tax base is very low, they need to charge a much higher rate.</div>
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I guess that could be true sometimes, but often high property taxes are because of how a community votes to spend money. Like a PP, my parents live in a small community with an excellent independent school system. It's really expensive to maintain that. They also have garbage pickup where they don't put it out at the curb (the garbageman comes to their storage spot and takes it from there) and lots of other extra services. It all depends on the community's budget.
 

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Yeah, when we were looking in Texas, a big factor was taxes. Now that we've decided to stay in Louisian, we're having to look at homeowners and possibly flood insurance...depending on what area we're in...so....lots of factors for any area I guess. The actual mortgage isn't always the deciding factor. Totally understand where you're coming from!
 

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<div>Originally Posted by <strong>alicia622</strong> <a href="/community/forum/post/7977462"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Yes I have thought about insurance. Actually, I had realized about taxes but was just surprised by the tax rate in this town. It's a tiny little town with a tax rate 50% higher than what I currently have in the 'city'. So I was looking at the rates for the towns in the area and am really surprised by the huge variations. I'm trying to figure out what makes them vary so much. I expect my taxes to go up because we are significantly upgrading houses so the value will be more.<br><br>
So the towns assesment of property value is going to vary from the banks assessment- right?</div>
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This depends. In my neck of the woods assessed rates and sale prices are very close and sometimes the assessed rate is higher<img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/greensad.gif" style="border:0px solid;" title="greensad"> Let's just say if I needed to sell my house right now I'd be thrilled to get the assessed rate.<br><br>
You might be getting more for your tax dollars. Our property taxes are higher than a lot of the place around here, but trash and recycling are included. Some other places near by charge extra for monthly fee for trash.
 

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<div>Originally Posted by <strong>alicia622</strong> <a href="/community/forum/post/7977462"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">So the towns assesment of property value is going to vary from the banks assessment- right?</div>
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Maybe. In my county, if a house sells for more than its assessed value, the county assessor automatically raises the assessed value to the sale price. Technically, there is an appeal process, but it's kind of hard to argue that your house isn't worth X dollars when that's how much you paid for it, KWIM?
 

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Where I live the houses would NEVER sell for their "assessed" value. The banks assessment for hte mortgage is accurate, but the actual town's assement is WAY low. If a house is assessed at $80K it is going to sell for around $190 at least. Amazing what happens in different parts of hte country!
 
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