August 30, 2018

Property Taxes and Your Home

As a buyer, one must be well acquainted with the function of property taxes in society and available payment methods

There are two things that are guaranteed in life – death and taxes. Both are inevitable; they must be handled at one point or another. The latter of the pair – taxes – can take many shapes and forms in everyday life, including sales tax, income tax and inheritance tax.

Real estate and homeownership, however, brings property taxes into the front and center. This type of ad valorem tax is calculated by multiplying the determined tax rate by the current market value of the structures, fixed buildings and lands one may own. The concept is that the benefit homeowners receive thanks to these taxes should outweigh the cost of paying them.

What does this mean in Alachua County? It has been reported that Alachua has the highest property tax rate among Florida’s 43 largest counties, with the average property owner paying 1.35 percent of their home’s assessed value. The national average is 1.17 percent, and in Florida it is 1.09 percent.

This tax rate is likely to increase in the future because the taxable value of property continues to rise. In the last year alone, it increased 4.4 percent in the past year.

There are many different ways to go about paying these taxes. In the process of paying a mortgage, it is likely the buyer in question will also have an escrow account with the mortgage lender that simultaneously collects both insurance and tax payments in a monthly lump sum with the mortgage payment.

When the buyer’s mortgage payments end, it will be their responsibility to pay the taxes directly to the Alachua County Tax Collector on an annual basis between Nov. 1 and March 31. Be aware that the earlier one pays them off, the higher the discount one receives, starting with a 4% discount if paid off in November.

There are alternative ways to pay off the property taxes, including the tax collector’s own alternative payment method. This includes paying next year’s taxes through quarterly payments from June to March and receiving up to a six percent discount. To do this, one must fill out and return an Installment Payment Application to the office of the tax collector before April 30.

Property taxes are here to stay. Keeping this information in mind, I advise Gainesville buyers to always ask for an entire lien of outstanding balances on the desired property and to take into account this often-forgotten annual payment on your new home to truly make sure a house is within the budget. As a buyer, one must be well acquainted with the function of property taxes in society and available payment methods in order to avoid losing your beloved Gainesville home.

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