Researching Property Taxes

• Property tax rates
• Assessed value
• Tax exemptions and incentives
• Future tax changes
• Questions to answer

Taxes are a primary source of revenue for local governments and help fund essential services like schools, public safety, and infrastructure. Understanding the property tax implications when building a custom home or undertaking a major home renovation is vital to ensure you can afford the ongoing costs associated with your property.

Property tax rates¶

Research local property tax rates in the area where you plan to build your custom home. Rates can vary significantly between different municipalities and even within the same city or county. Understanding the tax rate will help you calculate your annual property tax bill and ensure it fits within your budget.

Assessed value¶

Property taxes are based on the assessed value of your property, which includes the value of the land and any improvements (like your custom home or significant renovations). When you build or remodel, the assessed value is likely to increase, which can result in a higher property tax bill. Make sure to factor in the potential increase in property taxes when budgeting for your project.

Tax exemptions and incentives¶

Look into available tax exemptions, deferrals, or incentives that might apply to your custom home project. Some jurisdictions offer property tax breaks for specific types of construction, energy-efficient upgrades, or for certain groups of homeowners (e.g., seniors, veterans, or people with disabilities).

Future tax changes¶

Keep in mind that property tax rates and assessed values can change over time, usually increasing. Stay informed about any potential changes in your local property tax policies or rates and factor them into your long-term financial planning.

Research local tax rates, assessed values, and potential tax exemptions or incentives to help you budget for your annual property tax bill and make informed decisions about your custom home project. Keep in mind that property taxes may change over time, so be prepared for potential increases in the future.

Questions to answer¶

• Have you researched local property tax rates in the area where you plan to build your custom home? How do these rates compare to other nearby areas, and do they fit within your budget?

• Are you aware of how the assessed value of your property, including the land and improvements, will impact your property tax bill? Have you factored in the potential increase in property taxes due to building your custom home?

• Have you looked into available tax exemptions, deferrals, or incentives that might apply to your custom home project? Are you eligible for any of these benefits, and how would they affect your overall property tax bill?

• Are you prepared for potential future tax changes, including increases in property tax rates or assessed values? How will you stay informed about these changes and incorporate them into your long-term financial planning?