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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 usually fully
deductible against current income taxes. Check with your
tax professional.
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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 process, which begins 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 may be 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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