Buying a home is quite expensive and that is before you add property taxes to the purchase price. Unfortunately, some new homeowners go into this new part of their lives without factoring this new cost in only to chock at the amount they have to pay per month.
State from state, the percentage of property taxes varies. This class of tax is important to keep your area’s schools, police force and services, security and the social amenities around you in top shape. So, next time you want to storm into the office of tax lawyers in Toronto and complain about this rip-off, you may want to think twice
What causes property tax to rise?
In most states, the percentage remains the same, but you may notice a few changes that are likely caused by any of these reasons.
- Extensive Renovations
There are lots of renovations that you can do that will add value to your home. Re-doing the bathroom, roofing with the latest technology, making the attic livable and converting the basement into a cozy room will all do the house some good. Its value will go up and so will the property tax. This form of tax is based on the value of your property on the market and so those changes will take effect almost immediately. This is especially so when your property is listed.
Before making any changes that will affect your tax bill, you may want to calculate the cost of renovation and compare it to the increase in tax. If the cost will be a little too high, you may want to hold it until you have enough money saved.
- Value of Property Near you
If your neighbors sold their property for more that the asking price, this will affect you adversely. Your tax bill will go up based on the fact that the property around you is worth more than its initial valuation. The main and only benefit here is that your property could be worth more if you decided to sell it, and also if you want to borrow some of its accumulated equity. If you have no intention to do any of those two, you will be disadvantaged.
- Government Budgets
If the government is short of funds and wants to raise more for a fiscal year, it will look into property taxes to lower the deficit. Fortunately, there are caps put by the law that the feds cannot touch and so the percentage of increase is usually quite low. Still, your property tax is likely to increase every year.
- New Amenities
New schools in your area are good for your children and even the value of your property, but they will also come with a price; higher tax bills for residents. Communities and counties are often called upon to foot the bill for the institution about to be set up and so you can imagine the tax burden. Property market in the area is also likely to look up owing to the new families that will be moving there and so your tax bill will most property increase.