Taxes and deductions for property owners
If you own real estate, you’re on the hook for two primary types of housing-related taxes:
Property taxes
If you own a house, you’re probably familiar with property taxes. Your local government collects real estate taxes to help pay for services and projects that benefit the community — emergency services, libraries, schools, roads, and the like.
You pay these taxes directly to your local tax assessor each year or as part of your monthly mortgage payment. Property taxes are based on the assessed value of your land and any buildings on it.
As long as you own the property, you continue to pay real estate taxes. You don’t stop when you pay off your mortgage, nor do you stop if you no longer use the home as your primary residence. If the property is in your name, you’re on the hook for the taxes.
Of course, property taxes change periodically, and your bill could be higher or lower than in previous years. This can happen when your home is reassessed or when your local government updates the tax rate (either up or down).
How can I lower my property tax bill?
Estimates show that 30%-60% of properties in the U.S. are over-assessed, which means you could be paying too much in taxes. If you think the assessor made a mistake, you can appeal your home’s assessed value.
You may also be able to lower your tax bill by taking advantage of programs that offer tax deductions and exemptions for
- Seniors.
- Veterans and their surviving spouses.
- People with disabilities.
- People who own agricultural land.
Also, most states offer homestead tax breaks that exempt part of your home’s value from property taxes.
One other option: Depending on where you live, you may be eligible for a discount if you pay your tax bill early. Check with your local tax office to learn about any tax deductions, exemptions, and discounts available in your area.
Capital gains taxes
Another type of tax that homeowners and investors might owe is capital gains tax. You trigger this tax if the proceeds from selling your property are greater than its cost basis.
<p data-block-key="47…….
Source: https://www.fool.com/the-ascent/taxes/real-estate-taxes-your-complete-guide/