Real Estate Tax-what is it and how does it work?

Question

I am buying a new home in Florida.The purchase price is $1.2 million and real estate taxes for 2006 were $12,506.This will be my first home in the U.S.A and I dont know how real estate taxes work.Is this the amount I have to pay every year ?Can i reclaim the total tax payment on my federal tax return?And when during the year do I have to pay this tax payment and to whom?Hope somone can help THANKS

Answer 1

You will pay ad valorem property taxes and school district taxes every year. Each is capped at 10 mills, or 1% of the home's value. Expect the taxes to go up. While doubtful, you could be charged $24,000.00 next year. The Property Appraiser for your county will reassess the value of your house, and recalculate your taxes. This will happen every year. Generally, a U.S. citizen's state and local taxes (of which this is one) are deductable from his federal income tax' adjusted income total. I have no idea how it works with non-U.S. citizens.

The good news is that the Florida Legislature is meeting in a Special Legislative Session to address our high property taxes. However, no one knows what that relief will be at this point. Many legislators are talking about only offering relief to Florida residents. You may want to actually move here.

Answer 2

In most cases, the property will be reassessed when you purchase it. You should plan on the taxes going up after you close on it. Check the current assessed value and figure the %age. Apply the same %age to the sales price for a reasonable estimate of what it may be.

The tax will be levied every year. It will be paid to the city or county tax collector. They can advise when it will be due, it varies from state to state.

You can take a deduction for the taxes on your Federal income tax return. The value of the deduction will depend upon your marginal tax rate. The maximum rate is 35% so that's the maximum value of the deduction.

Answer 3

Your realtor will tell you that the taxes may be due by 12/31, and considered late by the 15th of the next month.

Your accountant will tell you the rest. If you have this kind of money to spend on a dwelling, then surely you can pay for sound advice.