The Tax Man Cometh…..
The last 2 weeks we have been diving into the world of taxes and how they impact you when you own, buy and sell real estate. In week 1 we dealt with the The Land Transfer Tax and week 2 we discussed The State Excise Tax. We are wrapping up the series with County Property Taxes.
The Gift that keeps on giving
The taxes discussed in the previous episodes are typically a one and done issue. You sell the house, and part of your proceeds go to to take care of the taxes at closing. Property taxes are a recurring expense of home ownership.
The county your new property is located in requires that you pay taxes on all real property in the county. Every county has a different rate and monies generated from property tax pay for local services like schools, community amenities (parks and services) and are used for operating expenses of the county administration.
For many small counties likes those here in the Albemarle area, the tax base for the county is heavily influenced by residential property. Tax rates can vary greatly county to county and if you are shopping for homes in a general geographic area, across multiple counties, you need to consider the tax rate before settling on a home. The rates vary greatly and your house payment could grow above your budget if you don’t take the tax rate into consideration.
First In Lien…..no that is not a typo….
Property taxes are a first position lien on your home. Outstanding taxes on a property will be paid before any other item. If you owe back taxes on a property, they will have to be cleared before the deed is recorded and exchanged. When you sell the home, the county is going to insure the taxes are paid and up to date.
The attorney’s working your closing will insure that all taxes are up to date and that the seller is paying for the portion of the tax year that they owned the home.
For a buyer it is important to know that the amount of taxes you pay is typically added to your payment and held in Escrow (EP20). It’s also important to note that NC homes are reassessed every 10 years. If your home goes up in value (which it likely will…you want it to appreciate…)your payment will need to also go up to cover that amount so you aren’t left in a deficit when the tax bill comes due.
More coming your way
The series on taxes is wrapped up but as always if you have questions or want more info, I’m just phone call or email away from the information. I love to teach and educate and I think it is what sets me apart as an agent. You can do your own research on all things real estate over at my web site or YouTube channel. Be sure to like and subscribe when you get there! Until next time….Welcome Home!
Chris Whitehurst
Rose and Womble
252 312 2263