Benjamin Franklin once said there were only two things certain in life: death and taxes. Okay, you can probably find more things than that that are certain, but while you think about it, you might as well take the time to get more familiar with how property taxes work -- especially since your hard-earned money is paying for them.
So you want to buy a home? Once you sign the mountains of papers, the home and its gorgeous kitchen, huge backyard, home office and property tax bill are all yours. Property taxes are collected by your local governments and are based on the value of your property. The taxes you pay -- once or twice a year depending on your area -- support your local schools and community.
Before you sign on the dotted line for your mortgage, you should know all of your financials, especially what your annual property taxes are. Make sure you ask the real estate agent to provide you with the numbers before you even decide to make an offer on the home.
The actual formula used to calculate property taxes can be an entire article in itself, but we’ll tell you this -- the government decides what the tax rate will be against the value of your home. Each tax jurisdiction is different, so the amount of property taxes that you pay in the Town of Poughkeepsie will be different even if you buy a similar home in Rhinebeck.
There are some categories of homeowners who qualify for exemptions from property taxes. For example, there is the STAR (School Tax Relief) exemption, which is an exemption for residential property that is used as the owner’s primary residence. Senior citizens -- those aged 65 and up who meet certain income limitations -- may qualify for up to a 50 percent reduction in the assessed value of their property.
Sometimes your property tax bill might seem a little high compared to the value of your property. You are entitled to appeal the bill. To do this, you can challenge it by following the procedures on your property tax bill. Make certain that the information about the size of your home and the number of bedrooms and bathrooms is correct. Compare your home to others in your area that have sold and that are similar to yours. With this information, you can contact your local assessor’s office and make your case.
If you’re still not happy with the decision, you can continue to appeal the review, but keep in mind it can take months for a final decision.