Nobody wants to pay more than necessary to the government. That’s why many home buyers look for areas with lower property taxes.
Before you write your offer, consider these little-known fees and taxes that may increase your overall expenses.
How Property Taxes Impact Your Monthly Payment
When you buy a home with a bank loan, your monthly mortgage payment includes principal, interest, taxes, and insurance – commonly known as PITI.
Interest is usually the largest portion of your payment. It goes directly to your lender. The principal belongs to you. It reduces the amount you owe to your lender.
Taxes and insurance go into an escrow account where the bank will keep your money until your annual insurance payment and your bi-annual property taxes come due.
Property taxes are a significant part of your monthly payment. For instance, on a $300,000 home in Dublin your property tax bill is approximately $7,000 per year. Therefore, $583 are added to your mortgage payment every month.
Lower Property Taxes Don’t Equal Lower Cost
If Dublin taxes seem high you could move to an area with lower property taxes, like a township in Delaware or Union County.
While your property taxes may be much lower, many unincorporated areas as well as a few cities impose a School Income Tax of 1% or more.
Here are some Central Ohio School Districts that charge a school income tax (click here for the complete list)
- Jonathan Alder
- Madison Plains
- Teays Valley
- Big Walnut
- Buckeye Valley
- Canal Winchester
Other Hidden Cost You Should Consider
Condominium Fees can make a big dent in your monthly budget. Costs vary widely starting as low as $100 per month up to $500 and more.
Condo fees often include water and trash service, as well as property insurance. So, you’ll see some savings over single family homes. Sometimes condo fees are higher to build reserves for capital improvements, such as roof replacement.
Homeowner Association Fees are typically charged on an annual or quarterly basis. They run between $50 and $150 a quarter and mostly cover landscaping for common areas.
You will encounter much higher association fees for patio homes, as they include fees for a club house, fitness center, and swimming pool.
Special Assessments are levied by local governments to pay for infrastructure. We see them with new developments for road construction and sewer installation.
Special assessments should be disclosed if known to the seller. However, it is good practice to check with the building department and local tax authority on any upcoming assessments that may impact your tax bill.
Call or text me TODAY at (614) 975-9650 because the housing market is less competitive in Fall!