Buying a new home is exciting, but finding one that you can afford and setting up a housing budget is another story. Not only do you have to include your monthly mortgage payment in your housing budget, but you also have to include homeowners insurance premiums and property taxes. Because property tax rates and home values change from year to year, estimating the home’s property taxes is the only way to determine whether you can afford a house.
Call your tax assessor to find out the current property tax rate for the area. As of 2011, the average tax rate in the United States was approximately 1.3 percent.
Ask the assessor for the home’s latest assessed value.
Multiply the home’s assessed value by the current property tax rate to find the estimated property taxes. For example, if the home’s value is $150,000 and the property tax rate is 1.3 percent, the estimated annual property taxes for the home is $1,950 or $150,000 times 0.013.
- Although home buyers typically buy a home close to the assessed price, the amount of your mortgage won’t determine the property taxes owed on a house.
- If you feel that the assessed value of the house is too high, you can dispute the assessment or ask for a reassessment, depending on the regulations of the city or county.
- Some states charge taxes per $1,000. For example, if the property taxes are $16 per $1,000, the property tax on a $150,000 home is $2,400 or $16 times $150.
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