Does refianace increase you property taxes?

Question

When you refianace does your property taxes increase?.

Answer 1

It is possible that a property will be reassessed after a refinancing.

There are localities that are using refinancing appraisals to reassess taxes.

You should check with your local (county) assessor's office to find out.

I added a link to an article describing this fact since this apparently is not well-known.

Answer 2

Wow! I just read your answers...

Refinancing has absolutely nothing to do with property taxes.

One of the answers touched upon an appraiser coming out.

Well, there are several ways to determine the value of a house, and they are all independent of one another.

There is something called an assessed value, and there is something called an appraised value. They are quite different from one another.

The assessed value or SEV (State Equalized Value), is determined by a numer of factors put forth by the municipality where you live. This is the taxable value of the home.

The appraised value, is typically determined by an appraiser (Duh!) or it could be determined by way of a market analysis by a realtor. This is where like properties are checked for selling prices in like neighbourhoods to determine a market price.

They aren't related, and have nothing to do with one another.

Now, with respect to your question, you have either refinanced, or are going to refinance. What you are doing is efffecting the manner in which you are purchasing the house. This has no effect on the value at all.

I'll give you a brief example:

Let's assume you own a home with a market value of $100,000, and an assessed value of $85,000. The mortgage is at 9%, the payment is $600 a month, and at this point you owe $40,000.

You have an opportunity to get a mortgage with an interest rate of 5% and your payment is only $300 a month. The mortgage cost you $5,000 so what you owe on the house now is $45,000.

What about the value of the home?

It hasn't changed! The market value and the assessed value are still the same.

Now it's true that the new mortgage company will send out an appaiser to make sure the house is worth the amount being refinanced, but that's between you, the appraiser, and the new mortgage company. How's the municipality even going to know?

I think that's where the confusion is. You aren't selling the house (which is a different situation entirely), you are refinancing.

All you've done is created a more favorable payment structure and lost a little equity.

Answer 3

Refinancing a home for the same amount as a previous mortgage is not likely to trigger any increase.

The city/county taxing entity ALWAYS knows when you refinance with a new company. In order to protect their loan, the new company pays off the old company and files a new deed with their interest on the property listed. You should even receive the old mortgage and deed indicating that it has been paid in full. In effect, the home gets bought and sold again.

And any activity, particularly if there is a change in value of the mortgage, can trigger a reassessment. And depending on the rules in your city/state, they may automatically raise the value to match the new mortgage. In some places the cap on annual increases only applies to the same owners. And now a 'new' owner holds the mortgage, preventing you from claiming a cap.

Know the rules for your area before you do things! Mortgage companies are supposed to give you full disclosure.

Answer 4

The only way that refinancing can increase your property taxes is if the value increases for your home when it is re-appraised, which is usually done when you refinance. However if the city does not know then the taxes will not increase. You do not have to report your appraisal to the city. However sometimes the city does their own appraisals. My house appraises for $112,000. However the city still shows it appraised at $86,000. Now if they come up & decide to raise my taxes. They can not raise them no more than 10% per year. I just refinanced in July.

Answer 5

The only way to increase your property taxes is to have the assessor's office increase the value of your property or for you to make a taxable property improvement.

Refinancing doesn't do this.

Answer 6

sure, your taxes improve as your county tax assessors fee will improve. this is not unfair because there is no ascertain that your fee will improve and your tax legal duty will upward thrust. And this is not like the authorities demands you pay the better taxes even as your fee decreases. in the journey that your objective change into to really pay for an area to stay in, you may want to lease. you're really fooling your self that you probably did not also purchase for the funding fee. yet shall we use your premise for a 2d. if you're actually not procuring for funding might want to you be prepared to make a take care of the tax assessor to renounce one hundred% of the capital benefit even as the sources change into finally offered in lieu of an improve in sources tax? for sure not! it would not count number because existence would not artwork that way.

Answer 7

No. Refinancing is a loan agreement, and does nothing to change the value of your property.