This is an unpleasant topic, especially if you live in New York State. In our current high-rising real estate market, it is very important to not lose sight of property taxes when you are making financial decisions around the price range you are looking in.
One of the most important, but overlooked, aspects of purchasing a new home is the current assessed value in comparison to what price you are paying for the home. The assessed value of a property is what the current property taxes are based on. In the current market, 99.9% of the homes will be selling for more than the current assessed value.
EXAMPLE: A home for $300,000 with a current assessed value of $200,000. For that home, the current property taxes will be based on the $200,000 current assessed value. Let’s say the current taxes are $8,000, which would be a tax rate of 4% ($8,000/$200,000=4%).
My professional advice is to always plan for the worst in terms of financial decisions made around homeownership. So in this example, the risk is that your purchase for $300k could trigger a reassessment of the property, which will most likely lead to a new assessment of $300k. So now your property taxes could shoot up to $12,000 ($300,000 x4%). That is a $4k annual increase to your bills or $333 per month.
Please understand and analyze the assessed value when purchasing a home. Know that the new market value (what you pay for the home) could turn into the new assessed value. Then your new tax bill will be just that, another bill for you to pay! Hopefully, there is no shock around this new monthly bill!
For ADA assistance, please email email@example.com. If you experience difficulty in accessing any part of this website, email us, and we will work with you to provide the information you seek through an alternate communication method.