Understanding Property Taxes

Property taxes are taxes imposed by local governments on real estate properties, including land, buildings, and improvements made to the land. These taxes are a major source of revenue for local governments and are used to fund various public services such as schools, road maintenance, public safety (police and fire departments), parks, and other community projects. When purchasing a home it is important to consider the cost of property taxes in addition to your mortgage payment in order to determine if a property will fit your budget. Tax rates vary from Gainesville to Alachua to all of the other surrounding areas, so even a difference of just a few miles can make a big difference in your tax bill. 

Here are some details that you will want to know about property taxes as a homeowner:

• Assessment of Property: The local government assesses the value of the property periodically to determine the property tax amount. This assessment usually involves evaluating the market value of the property based on factors like location, size, amenities, and comparable properties in the area.

• Tax Rate: Once the property value is assessed, the local government sets a tax rate, also known as a millage rate or multiplier, which is applied to the assessed value of the property to calculate the property tax amount. This rate can vary significantly from one area to another and is often expressed in terms of dollars per thousand dollars of assessed value.

• Payment Schedule: Property taxes are typically paid annually or semi-annually. The due dates and frequency of payments can vary depending on the local government's regulations. It's important for homeowners to be aware of these payment deadlines to avoid penalties or late fees.

• Tax Exemptions and Deductions: Some jurisdictions offer tax exemptions or deductions for certain types of properties or individuals, such as senior citizens, veterans, or properties used for specific purposes like agricultural land. The state of Florida offers homeowners a Homestead Tax Exemption for their primary residence that can help save thousands of dollars a year on property taxes.

• Impact on Affordability: Property taxes can significantly impact the overall cost of homeownership. Buyers should consider the property tax rate and how it fits into their budget alongside mortgage payments, insurance, and maintenance costs.

When shopping for a home it is important to ask your real estate agent about what the property taxes on a home could potentially be in order to factor this into your budget. Estimates online and tax amounts paid by the current homeowner are not always going to be accurate for a new owner and will need to be verified. If you have any questions about property taxes or want to learn about how to take them into account when shopping for a home, give our team a call! We would love to provide you with any information you may need or find that information from a relevant professional for you. 

To learn more about property taxes, take a look at this article from Investopedia.