“What Every First-Time Buyer Should Know About Property Taxes”

When you’re buying your first home, it’s easy to focus on the purchase price and monthly mortgage payment — but one ongoing cost that often surprises new homeowners is property tax.

Understanding how property taxes work will help you plan your budget realistically and avoid unpleasant surprises down the road. Here’s what every first-time buyer needs to know.

1. What Property Taxes Actually Are

Property taxes are annual fees that homeowners pay to local governments. These funds help support essential community services — like schools, fire departments, road maintenance, and parks.

The amount you pay depends on two key factors:

• Your home’s assessed value (set by the local tax assessor)

• The local tax rate, also known as the mill rate or levy rate

2. How They’re Calculated

Here’s a simple example:If your home is assessed at $300,000 and your local property tax rate is 1.5%, your annual property taxes would be $4,500.

Keep in mind that assessments and rates can change from year to year — so your tax bill might increase over time.

3. When and How You Pay Them

Most homeowners pay property taxes through an escrow account as part of their monthly mortgage payment. Your lender collects a portion each month and pays the taxes on your behalf when they’re due.

If you don’t have an escrow account, you’ll need to pay your taxes directly to your local tax office, typically once or twice a year.

4. Why They Vary by Location

Two similar homes in different neighborhoods can have very different tax bills. That’s because tax rates depend on local budgets, school funding, and public services. When comparing homes, be sure to check each property’s annual tax amount — it can significantly affect affordability.

5. You May Qualify for Exemptions or Discounts

Many areas offer property tax exemptions or reductions for:

• First-time homeowners

• Primary residences (vs. investment properties)

• Seniors, veterans, or disabled homeowners

Ask your Realtor or local tax assessor’s office if you qualify — even a small reduction can save you hundreds each year.

6. Reassessments Can Affect Your Future Payments

After you buy, your property may be reassessed based on the purchase price. That can cause your taxes to rise, especially if the home’s market value increased significantly. It’s smart to ask your Realtor or lender for an estimate of your new tax rate after closing.

✅ Final Thought

Property taxes are a crucial part of homeownership — and understanding them helps you plan wisely. By knowing how they’re calculated, when they’re due, and what affects the amount, you can budget confidently and avoid surprises in your first year as a homeowner.

If you’re planning to buy your first home and want help estimating your full monthly costs — including taxes — I’d be happy to guide you through the numbers.