September 9, 2007
Understanding Property Taxes
Understanding Property Taxes
Property tax increases are a popular method used by municipal and county governments to raise revenue, but they can also have a big impact on the local real estate market.
In most cases property taxes are levied as a percentage of a home's value, or an acceptable representation of the home's value. Governments generally assess homes at 100 per cent or less of their estimated market value in an attempt to keep taxes affordable. By this method, local real estate trends are kept at arm's length, and property owners don't have to worry as much if a neighboring home sells for $10 million. Property taxes often generate the majority of a city or county's annual operating budget for hospitals, school systems, waterworks, parks, libraries, police, and other expenses.
Some property taxes are limited to a certain cross section of homes, or homes above a certain market value, in order to protect affordable real estate. One such example of this was seen this summer 2007 in Ulster County, New York, where a proposed real estate transfer tax was only meant to apply to homes above the median sale value for the area. Values there were destined to shift as buyers searched out properties below the median price range.
Every property tax change is a new opportunity for real estate buyers. The trick is knowing what to expect from different tax strategies, and how long those effects will last.
If you havea any specific tax questions about the Nassau market, please don't hesistate to contact us. We'll be happy to answer any questions you may have.
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