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Q: |
How do
property taxes work? |
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A: |
Property taxes
are what most homeowners in the United States pay for
the privilege of owning a piece of real estate, on
average 1.5 percent of the property's current market
value. These annual local assessments by county or local
authorities help pay for public services and are
calculated using a variety of formulas. |
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Q: |
Are property
taxes deductible? |
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A: |
Property taxes
on all real estate, including those levied by state and
local governments and school districts, are fully
deductible against current income taxes.
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Q: |
Where can I
learn more about appealing my property taxes?
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A: |
Contact your
local tax assessor's office to see what procedures to
follow to appeal your property tax assessment. You may
be able to appeal your assessment informally. Mostly
likely, however, you will have to go through a formal
tax-appeal processes, which begin with an appeal filed
with the appropriate assessment appeals board.
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Q: |
How is a
home's value determined? |
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A: |
You have
several ways to determine the value of a home.
An appraisal is a professional estimate of a
property's market value, based on recent sales of
comparable properties, location, square footage and
construction quality. This service varies in cost
depending on the price of the home. On average, an
appraisal costs about $300 for a $250,000 house.
A comparative market analysis is an informal estimate
of market value performed by a real estate agent based
on similar sales and property attributes. Most agents
offer free analyses in the hopes of winning your
business.
You also can get a comparable sales report for a fee
from private companies that specialize in real estate
data. You also can find comparable sales information
available on various real estate Internet sites.
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Q: |
Are taxes on
second homes deductible? |
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A: |
Interest and
property taxes are deductible on a second home if you
itemize. Check with your accountant or tax adviser for
specifics. |
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Q: |
What is an
impound account? |
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A: |
An impound
account is a trust account established by the lender to
hold money to pay for real estate taxes, and mortgage
and homeowners insurance premiums as they are received
each month. |
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Q: |
Do all loans
require impound accounts? |
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A: |
If you are
taking out a FHA or VA loan, the lender can require an
impound account to pay real estate taxes and hazard
insurance premiums, as with a standard loan. Most
conventional loans do not require an impound account.
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