Why It’s Important to Understand Your Property Tax Numbers

When a person buys a home for the first time, they may overlook a critical factor associated with home ownership: their property taxes. Property taxes have a significant impact on your life, in addition to real estate ownership. Understanding property tax numbers is an essential part of ownership, care, and your utmost attention should be devoted to learning about these figures.

Property Taxes Make Up a Major Part of Home Ownership Costs

When you look at the cost of owning a home, the major factors associated with this asset are your mortgage payments, interest, principal, and property taxes. While property taxes fluctuate widely across the United States, in many places property taxes make up a significant amount of the cost of your home and therefore require real analysis. If you don't take the time to understand both what your current property taxes are and what they can be increased to, you may end up with a home that is out of your financial means. This is why it’s extremely important to take the time to understand what your property taxes are, and what they have traditionally been increased by, in order to understand whether they are within your budget.

Understand What You Are Paying for

Take some time to understand what your property taxes entail and what benefits accrue to you (and your community) when you do so. Of course, the answer will fluctuate from community to community — but property taxes typically tend to include the cost of public school, sanitation department/services, and your local fire department. Other costs often included are library services and park maintenance. When you dive further into the details of your property tax numbers, this will allow you to understand the programs that you can benefit from, as well as the returns that you can get on your taxes.

Avoid Overpaying On Your Taxes

Luckily, there are many programs that will allow you to reduce the property taxes you are currently paying. In New York state, for example, the STAR program allows you to reduce the total you owe in property taxes. It’s important to take the time to learn about your current property tax situation and how you can possibly reduce your balance as a whole. While most communities will try to equitably divide the cost of your property taxes, some homeowners may end up being charged an inequitable share. When you thoroughly examine, and learn, every detail of your property taxes, you may be able to have your taxes grieved and ultimately reduce the total cost that you will end up paying.