As real estate prices rise and the housing market remains competitive, it’s important to know your rights as a homeowner. When you buy a home, there are several property taxes that may come as a surprise. These taxes are usually different from one location to another and may have unexpected costs for the usage of utilities such as water and electricity or even school tuition for children attending local schools. Some properties also have additional taxes that you must pay on top of the basic property tax. This includes special assessments, fire department dues, and sewer maintenance fees. Understanding all these details prior to purchasing a home can help reduce the amount you spend on these hidden expenses. Below are six tips on how you can avoid paying excessive property taxes when buying a home.
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Check the current tax rate before you buy a home
The first thing to do is to find out how much you’re going to pay in property taxes on the home you’re thinking of buying. The best way to do this is by contacting your state government or municipality to find out the current tax rate for the area you want to buy in. This will give you an idea of how much you’ll pay each year in property taxes. Depending on the location of the property, the amount you pay in property taxes can vary greatly. For example, according to the latest data, an average property tax in the state of New York is $5,318 while the same rate in New Mexico is only $763. Knowing the current tax rate will help you estimate the future cost of owning a property in that area.
Don’t be afraid to negotiate with the seller
While the asking price of a property is usually the price that you must pay at the closing table, you can always negotiate to pay less. The seller may be willing to lower the price if you’re able to make a strong case. It’s worth giving it a try before moving on to another property that’s closer to your ideal price range. It’s also worth remembering that sellers often expect a certain amount of negotiation. They may even factor this into their asking price, making it more likely for you to reach an agreement. You can use the following tips to negotiate with the seller to lower the price of the property: – Ask the seller to pay part of your closing costs – Offer to pay the property taxes in advance – Offer to pay more than the asking price – Offer to pay a larger down payment
Ask for a credit in lieu of paying taxes up front
If you’re purchasing a newly constructed property, you may have to pay taxes on the construction of the property up front. This can be a significant amount of money on top of the closing costs. You can ask the seller to credit you this amount in lieu of paying it up front. This could be a good deal for both parties since you don’t have to pay anything up front to get the seller to credit you the taxes. This is a good idea if you’re buying a newly constructed home in a growing area. The construction of the property will generate taxes for the local municipality. As a result, you’ll be paying taxes on the home as soon as you move in.
Look at homes that are currently being built
If you’re looking to buy a newly constructed property, you may be able to get a reduced price. Some builders offer discounts on homes that are currently being built and are not yet complete. You may be able to get a better deal on a new home that’s not yet ready to move into. If you’re buying from a builder that’s currently constructing the home, you may be able to get a lower price or a better deal on the current model. This is because builders need to sell homes that are ready for their buyers as soon as possible to avoid losing money on construction costs.
Negotiate to pay only for what you need
When buying a home, you may also be required to pay for items such as fire extinguishers, water meters, sewer maintenance, and school taxes. You can negotiate with the seller to pay only for the items you need. If you’re buying a home that’s already completed, you may be able to have items removed if they’re not important to you. Alternatively, you can choose not to pay for them up front. This is especially true if you’re buying in a new neighborhood where these items haven’t been installed yet.
Conclusion
When buying a home, it’s important to understand the taxes that come with it. This can help you avoid paying more than you should in property taxes. To avoid excessive property taxes, you should make sure you know the current tax rate, don’t be afraid to negotiate with the seller, and ask for a credit in lieu of paying taxes up front. You can also negotiate to pay only for what you need.
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