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Question:
Are property taxes
deductible?
Answer:
Property taxes on
all real estate, including those levied by state and local
governments and school districts, are fully deductible
against current income taxes.
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Question:
Are taxes on second homes
deductible?
Answer:
Mortgage interest
and property taxes are deductible on a second home if you
itemize. Check with your accountant or tax adviser for
specifics.
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Question:
Do all loans require
impound accounts?
Answer:
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.
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Question:
How do property taxes
work?
Answer:
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.
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Question:
How is a home's value
determined?
Answer:
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 or
find comparable sales information available on various real
estate Internet sites.
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Question:
What is an impound
account?
Answer:
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.
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Question:
Where can I learn more
about appealing my property taxes?
Answer:
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.
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