This post was most recently updated on May 16th, 2023
If you’re in the process of purchasing your first home, congratulations! That’s an exciting milestone and an incredibly important step toward building financial security. Picking a property is more challenging than it seems, though. There are down payments, loan rates, and the actual property. But there’s another challenge you may have overlooked in all the excitement of buying a home: taxes.
A common misconception about homeownership is that your property tax will always stay the same yearly. That’s not necessarily the case, and it can change quite a bit depending on several factors.
Here are some tips for first-time home buyers in the real estate market.
Table of Contents
1. Understand Your Tax Bill:
Property taxes are determined by a complex formula based on property value and the tax rate of your local government. The result is your annual property tax bill, which you then pay to the county or municipality that provides services to your area.
The first thing you should understand about your tax bill is how it’s calculated and billed. You will be billed at different points during the year by your local government, and probably quarterly or annually, depending on their tax collection practices.
Your property tax rate is the tax rate of your local government. Local ordinances govern them, so sometimes their tax rates can differ from what you’re used to dealing with in other areas of the United States or worldwide.
2. Consider Property Appraisals:
Property appraisals are used to calculate your property taxes. They use comparable sales of homes in your area to estimate the value of similar properties. State-specific laws dictate how property appraisals are conducted, so you should consult with an attorney or certified public accountant for an expert opinion about what is required for a proper appraisal.
A property appraisal is just one of the many factors that can influence a property tax increase. The more similar a home is to others in your area, the more likely it is to be given a higher value by appraisers. If your home has unique attributes that set it apart from homes in your neighborhood, it might not be valued as highly.
3. Build Your Budget
If you’re a purchasing an investment property and need a rental property loan, consider reaching out to hard money lender. Even though annual changes in the local market mostly determine your property tax, other factors can impact your property tax and trigger a real estate tax increase, such as changes in mortgage interest rates. Your realtor will be able to help you set a budget for how much you can afford to pay each month toward your mortgage payments.
Hiring a real estate agent can help build your budget. An experienced agent will know approximately how many homes in your area sell for and can help you find housing that fits your financial needs.
4. Work with a Real Estate Agent
A real estate agent will work with you while looking for your first home. Ambergris Caye Real Estate can help guide you regarding properties in different neighborhoods and market conditions. Their knowledge of the local real estate market allows them to make good recommendations, and it’s their job to help you find a home that is within your budget and fits your unique needs.
An agent’s job is to help you find a home that meets your needs and is within your budget. One of their most important jobs is to keep you informed about changes in the real estate market that can affect how much your property tax will be.
5. Visit Homes
If you have yet to go to the homes you’re interested in purchasing, take the time to visit them before offering on any property. Spending time there will help you better understand the neighborhood and determine if this is where you want to spend years of your life.
If you don’t have time to visit every home before placing an offer, ask your real estate agent to accompany you on tour. Their experience and neighborhood knowledge will help you decide which homes to visit when you have the time to look at them.
Ambergris Caye Real Estate has a great number of listings in prime spots with excellent potential for appreciation in value over the next years.