Whether you are buying a home for the first time, a veteran home buyer, or something in between, shopping for a new home can require a lot of effort! There are plenty of tips and tricks to consider when you explore your real estate market. However, the most important tip of them all is a secret hidden in plain sight.
Property Taxes.
But wait, what are property taxes?
The definition of property taxes per Quicken Loans:
Property tax is paid by an individual or entity on an owned property. Property taxes are a type of “ad-valorem” tax, which means they’re based on the assessed value of real property and some tangible personal property, such as boats or cars.
In the U.S., these taxes are generally levied by state and local municipalities and used to fund school districts, community amenities and other local expenses and projects. Property taxes can vary widely between states and even adjacent municipalities.Based on this definition you can assume that a property tax on your home quantifies its value as a multiplier on the true value of your home. As stated above, your home is considered property and the government decides its value via property taxes and levies.
The Secret: Pay Attention To Your Property Taxes
Whenever you shop for a home, it's safe to say that the higher the property tax, the higher the quality of the neighborhood. Whether it's a single family home, a condo, or a cabin in the woods, you want to keep an eye out for a higher tax.
If you are stuck between a home that costs more but has lower taxes and a home that costs less but has higher taxes, the higher tax has the best chance of being a better home.
Whenever you shop for a home, it's safe to say that the higher the property tax, the higher the quality of the neighborhood.
Whenever you are seeking the best value and best bang for your buck during the real estate proposal and earnest money phase, consult with your real estate agent and local tax officials to determine if the tax value of your property lines up with your expectations for a great neighborhood to live in.
Additionally, only if you have kids, consider the school districts in your potential future neighborhood. It's not uncommon to find that higher property taxes leads to more families, which is ultimately a better investment.
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