What You Should Know About Property Taxes
Property taxes are a major expense for luxury homes, but property taxes are not the same for every owner. Property taxes provide much of the revenue used to fund local and state governments in Arizona. As property values go up, Tucson property tax collections also rise, which means additional dollars are available for more Tucson public services. Alternatively, if property values decline, then Arizona government programs tend to decline and sales tax increase make up for the decline in revenue.
How much you pay for your homes property taxes depends on the value of your Tucson luxury home and also local Tucson tax policies. In the usual case, Tucson real estate value is established by government assessors. Once a value is set the tax rate is then applied. For instance, if the rate is $1.50 for each $100 in value, then a home worth $100,000 would have an annual tax bill of $1,500 or $125 per month.
The amount for Tucson property taxes is often complicated, so it pays to
ask questions:
What value is used to assess Arizona taxes? You might think that a Tucson
homes current market worth would be used to establish a value for tax purposes,
but that's not always the case. In many areas annual tax increases are limited
so the tax can be less than current market values might allow. Another approach
is to apply the tax rate to a portion of the assessed value of luxury homes
and not the full worth of the property.
What are the current owners paying for Tucson luxury homes? Is their tax bill consistent with neighboring Tucson homes of equal size and condition? If different, why?
How will Tucson property taxes impact your ability to borrow? Lenders use a number of measures to qualify borrowers and one of the most important is the percent of gross monthly income spent for mortgage principal, interest, Tucson property taxes, and luxury home insurance. Low Tucson property tax bills can make it easier to qualify for a loan to purchase luxury homes.
Are you or the current Tucson luxury home owners entitled to an exemption? Local rules vary, but those over 65, veterans, individuals with limited incomes, and others may be entitled to a full or partial exemption. For example, if the current luxury home owner has an exemption which will not apply to you, then current Tucson tax costs may be understated.
Can Tucson property taxes be deferred? To ease financial burdens for Tucson retirees, it may be possible to have property taxes accrue as a lien against a home. Tucson home owners in such situations will not need to pay some or all of their Tucson property taxes. Instead, when the home is sold, taxes are taken from the sale proceeds.
What are the income tax benefits of property tax payments? In the usual case, property taxes are deductible from federal and Arizona state income taxes. For details, speak with a Arizona tax professional. How often are Tucson luxury home assessments made? In some areas assessments are only made every two or three years. This means that Tucson property taxes may be based on values which are out of date.
If all of this seems complex, it is. The Tucson local tax assessment office
can tell you how the system works while real estate brokers can provide
general information. In the end, of course, there are always taxes to pay,
the only question is how much.
Written by Michele Dawson
Sherie says: Remember, I'm here to guide you through the entire real estate process!
