How are property taxes calculated?

October 3rd, 2022
calculate property taxes

Property taxes are a part of the cost of owning a home. When you buy a home you not only have to consider the cost of the monthly mortgage payment, but you also need to consider property taxes, homeowners insurance, any HOA dues, maintenance, and utilities.

Many people wrongly assume property taxes are a fixed cost, and that whatever amount is billed when you first buy the house, is what the amount will be for the life of owning the home. However, property taxes can change quickly after buying a home. Most counties assess property value annually, and adjust the amount due annually. Read the rest of this entry »

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Interest Rates And Your Monthly Mortgage Payment

April 21st, 2018

Interest Rates And Your Monthly Mortgage Payment Is Impacted


Many people are very focused on interest rates these days and are wondering where they are headed next and how it may affect their mortgage payment. Interest rates have been historically low for a very long time, and people are starting to fear that they may increase and have an outsized impact on the cost of purchasing a home.


You can see a chart of the long-term history of interest-rates by clicking here.  This chart shows that we are definitely near the bottom of where interest-rates have been over a long period of time. On the other hand, if interest-rates start to go up does it have as much of an impact as people think? Read the rest of this entry »

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Tax Credits When Buying In Washington DC?

July 30th, 2017

Tax Credits When Buying In Washington DC?


When buying a home in Washington, D.C. you should work with a lender familiar with Mortgage Credit Certificates (MCC’s) and who is participating in the MCC Program.  A Mortgage Credit Certificate allows eligible borrowers to claim a Federal Tax Credit of 20% of the mortgage interest paid on the mortgage during each calendar year.  The remaining 80 percent of the mortgage interest paid for that year may still be claimed as a tax deduction.

You can click here to get Read the rest of this entry »

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Does Your Lender Know 1031 Tax Free Exchange Rules?

November 19th, 2012

I had a client who was buying a property via a 1031 tax-free exchange. First of all, it’s actually a tax-deferred exchange, not tax-free. You might hear someone call it a like-kind exchange or a Starker exchange. A 1031 tax exchange is one where investment property is being sold and a replacement investment property is being purchased, and you use pertinent IRS tax code to defer the capital gains. Under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale and hence defer any capital gains taxes otherwise due. Read the rest of this entry »

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Gift Money And The Gift Tax

July 23rd, 2012

I often have people ask me if they can lend their son or daughter money instead of giving it as a down payment gift. Or some want to lend the money and then forgive the loan over time to avoid the gift tax. It seems many want to help their family but avoid taxes while they do it.

First, from an underwriting and mortgage guideline standpoint, this is not an option. Read the rest of this entry »

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Accountants Don’t Live In The Real World

May 31st, 2012

OK, it is time to fight. I am sure this will cause some anger, and possibly a heated exchange or two. But yes, I do think some accountants don’t live in the real world. They live in a fantasy tax world where taxes and tax decisions are the sole determining factor in all of the life decisions they encounter. I can see it now, when told by clients who were expecting a child, an accountant having a stern response around the costs and tax implications of said child. Want to get married? Better consider the tax ramifications first! And one of my all time favorites related to housing, is that Read the rest of this entry »

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Prepaying Your Mortgage Saves You Money, But How?

February 6th, 2012

If you are going to be in your house long term, or forever, prepaying your mortgage is a great idea if you can afford to pay extra. The best way to save money on debt is to not have it! But many people do not realize that prepaying a fixed rate loan does not reduce the monthly payment. Prepaying a loan simply shortens the term. So prepayment builds equity faster, and ends the loan sooner, so you save money by having the loan for a lesser amount of time. Read the rest of this entry »

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Is Your Local Tax Assessor Over Optimistic?

September 12th, 2011

Many of us feel that property taxes have not mimicked the course of real estate values. According to an April study by the National Association of Home Builders, the most recent available, property taxes across the U.S. have increased by nearly 20% from 2005 to 2009. But wasn’t 2005 when the real estate bubble burst? How could property taxes have gone up from 2005 to 2009? And over the same period, home prices in major urban markets decreased 31% Read the rest of this entry »

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A 3.8% Tax On Real Estate Sales As Part Of Obamacare?

August 17th, 2011

For quite a while I have heard rumors that so-called “Obamacare” was partly being paid for by a 3.8% increase in the capital gains tax on real estate. This is mostly not true. If you dig deep into the issue you will find it will not apply to most people. However, in principle, there is an increase in the capital gains tax on real estate for some wealthier folks. Read the rest of this entry »

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