Before purchasing a piece of property and building a home there is some essential information you should be aware of – namely – property taxes.
Understanding how property taxes work and their effect on your dream of homeownership can go a long way in protecting your investment and saving you money.
At Santa Cruz Properties, we’ve been selling land in the Rio Grande for over 20 years and keeping families informed about land ownership for just as long. We understand that signing on that dotted line is only the beginning of your journey, and we want to make it as spectacular and easy as possible.
When purchasing land, remember this information about property taxes.
What are property taxes?
Property tax is a tax paid on real estate. The money collected in property tax is generally levied by the county but also tends to include monies that are paid to other local civic services such as school districts, water systems, law enforcement agencies, other government bodies, and other such services.#Property #taxes help to pay for local civic services like schools & law enforcement #SantaCruzProperties Click To Tweet
Because property taxes are set by the local government, it is important to remember that regulations and rates will vary based on where you live. You can learn about the specifics for the city or county you live in by contacting your local government tax office.
When purchasing a home – or land for that matter – you should be aware of how property taxes will be paid. Generally, property taxes are included in an escrow account and become part of your monthly mortgage payment.
However, this isn’t always the case, and you may be responsible for paying property taxes at various points throughout the year. Speak with your lender about the tax payment schedule for your area (Santa Cruz Properties will help you to figure this out).
How are property taxes assessed?
In Texas, the value of your property is assessed by a county property assessor. Depending on certain qualifications your home will be assigned a specific value.
The other factor that comes into play when determining how property taxes are assessed is the local tax authority. This group usually consists of several council or boards that determine how much tax revenue must be collected in order to maintain civic services for the following year.
Once they have determined their budget needs to cover these expenses, such as emergency services, libraries, and other such departments, the property tax rate will be handed down in the form of a percentage.
Whenever there is a disagreement about the property tax values, an appraisal review board is brought together to analyze the situation.
It is also worth noting that property tax rates are redetermined every year. While they may not change drastically from one tax year to the next, it is important to bear in mind that the potential for them to grow is there, and you should consider the financial implications of this potential yearly increase.
Get an idea of how much you might pay.
It can be a very helpful tool to become aware of how much property tax you will be paying in order to develop an effective budget. Remember, even when you finish paying off your mortgage you will still be required to pay yearly property taxes, so having a system in place can prove to be especially beneficial in the long run.
One term that you should become familiar with is “mill levy”. The mill levy (or mill rate) is the dollar amount determined for every thousand dollars of property value. While your tax rate will ultimately come down to in you in the form of a percentage, familiarizing yourself with the mill rate will help to keep you informed and ensure you are paying a fair share rather than too much.
If you want to determine your potential property tax, you will need two bits of information. The current value of your home and your local tax rate.
The equation is fairly simple: you will multiply the value of your home and property times the tax rate. For example, if your home and property are valued at $100,000 and your tax rate is 1.5%, then your annual property taxes are going to come out to be $1,500.
Of course, this is merely an example, and it is important to remember that your tax rate will vary depending on the county you live in and the city your property is in. There may also be additional fees that come with your property taxes so just be aware of all those add-ons to get the best idea of what you will owe.
Your local county tax office is the best resource for information.#SCPRGV Tip: The property tax formula is value of home & property X your tax rate #StayInformed Click To Tweet
Don’t forget to take advantage of tax breaks.
Depending on your property value and the local property tax rate, you can be in for a sizable payment every year (and month if you are paying taxes through an escrow account).
Luckily, there are a few tax breaks that are available to some property and homeowners, including:
- Homestead deductions and exemptions: This helps to decrease the taxable value of your property if you live on the property.
- Senior citizen and disabled homeowner exemptions: This is a special tax rate that is provided to individuals who are legally categorized within either of these groups.
- Veteran exemptions: These tax exemptions can benefit veterans or spouses of deceased military personnel.
- Home improvement exemptions: You may temporarily qualify for this tax exemption if you are making large improvements to your property and/or home.
At Santa Cruz Properties we can help you find that perfect property and keep you informed about property taxes.
At Santa Cruz Properties we know that property taxes can get to be a little complicated but our team of experts have the experience and know-how to help you find the perfect piece of land for your needs and can keep you informed on how to maintain your ownership.
With owner financing available, and prime locations all throughout the City of Edinburg, Santa Cruz Properties has the land of your dreams. Contact us today at (956) 383-0868 and we can help you find the right property for you.