iowahomeloans

As Real Estate Values Rise, Property Taxes Increase

Posted on: February 18, 2014

Rising real estate values have generally been good news for the residential real estate market. Appreciation has put many properties back where they would have been before the recession, and the market recovery has driven a surge in home buying. Unfortunately, though, rising real estate values also translate to rising costs in the form of increasing property taxes. If you’re shopping for real estate, keep in mind that as property values increase, your property taxes will go up, too. Make sure you budget for this potential surprise.

 

Find Out How Recent the Last Assessment Was

One of the first things you should do when you’re interested in a home is to find out how recently the last property tax assessment occurred. You can ask the homeowner, or check with the property tax assessor’s office to find out the interval for assessments, and when the next one is scheduled to occur.

 

If the property was assessed within the last 12 months, you should have some time before property taxes increase dramatically, as the value of the home should be reasonably current. However, if property taxes haven’t been assessed in two to three years, and the value of the home has increased since the last assessment, you should be prepared for the increase in costs related to an impending property tax assessment.

 

Be Prepared When You buy

When you buy a home, you should be prepared for an increase in property taxes. If you’re looking at homes right on the edge of what you can afford, you may want to shop for something smaller in case your monthly cost of ownership increases. You don’t want to find yourself living in a home you can’t afford because property taxes have gone up dramatically. Try shopping for a home that is at least several hundred dollars a month cheaper than you can afford so you’ll have some financial wiggle-room when costs increase.

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