You hear a lot of things when buying a home. One thing you never hear, though, are the words, “I can’t wait to pay taxes for this!” Unfortunately, though sales tax can be waived in most cases, annual property taxes cannot.
Everything You Need To Know
What are property taxes, you may ask? In short, property taxes are an expense split into two payments each year, based on the property value. In Indiana, these taxes are due twice a year; once on May 10th, and the other on September 10th.
Too often, first-time homeowners don’t calculate the expected fees of a property tax into their projection of how they will afford to buy a home.
No matter where you buy your new home–whether in Indiana’s Kosciusko County or elsewhere–property taxes help pay for important county-wide expenses such as road work, governmental officer’s pay, and school funding.
Also, your property is usually assessed every other year. During this assessment, things such as adding another bathroom, or completing any large remodels may increase the value of your property, therefore impacting the annual sum you are responsible for paying in property taxes.
How Can You Prepare
There is so much excitement around deciding to buy a home. It’s not uncommon for someone to be so close to the finish line of buying their first home, they just want to get it done as soon as possible, and that’s completely understandable! However, if you’re not careful, not paying attention to what your new home requires in the way of property taxes may put you in a hard spot later on down the road.
Before signing your closing agreement, make sure to inquire how much your property taxes will cost you each year. You can use online calculation tools which can help you determine what the added cost will be.
Having issues determining what a good price range for your property taxes would be? Financial advisor, Dave Ramsey, suggests that if the price of your mortgage plus the property taxes comes to more than 25% of your take-home pay, consider looking into buying another home so those fees don’t come up as a surprise.
Ask The Experts
The best part about working with realtors like Kim Clark in Kosciusko is her long-standing expertise in deciphering the small print when buying a new home. Be sure to ask her all your questions about property taxes and other fees you may not be thinking of amidst the excitement. Paying taxes is never exciting, but it doesn’t have to be a shock to your system!