Property taxes are a major expense for homeowners, sellers, and investors. Real estate agents, realtors, and homeowners should know the basics about property taxes to plan accordingly. Property taxes are one of the most important considerations when buying a property. Especially in areas with high tax rates, you might be paying more than your monthly mortgage payment in taxes per year. You need to know what you’re getting into before jumping on that house!
The way property taxes work is that they are paid by the person who owns the land and improvements- not just homeowners! Property owners may have to pay city, county, school district, or special purpose district taxes depending on where they live.
Property owners can get an estimate of their annual tax bills from their County Tax Assessor’s office – but keep in mind these estimates will only reflect current assessed value for properties within a specified area and do not take into account any recent changes in the property’s value or any exemptions, rebates, or tax credits you might be eligible for. The full amount of taxes due can’t even be estimated until all assessed values are finalized; which usually happens after January 1st when new assessments are completed.
Property taxes are an important consideration when buying or selling a home. What exactly do property taxes entail? Nassau County is one of the most tax-friendly counties in New York State and has some of the lowest property taxes rates in Long Island. You can find out what the tax rate is in your area, how much they cost for different types of properties, and what exemptions you may be eligible for. This article will cover everything from the basics to more complex topics like exemptions and senior citizen discounts.
Property Tax Breakdown In Nassau County, New York
Property taxes in New York can be a major expense for homeowners and renters alike. As the population continues to grow, property tax rates will continue to rise. In Nassau County, New York, there are many factors that affect what your annual property tax bill looks like: how much you paid for the home or apartment; whether it is vacant or occupied; if it has been reassessed by the county; and other variables such as special assessment districts.
The average homeowner pays $4,000 per year in property taxes. Renters pay an average of $2,500 annually. For both groups of individuals, this number varies depending on which municipality they reside in and the assessed value of their home or apartment.
Nassau County residents pay some of the lowest property taxes rates in New York State. If your home is valued at $317,000, the estimated annual taxes would be $2,979. Taxes range from town to town and even street to street.
Taxes are billed annually in July or August based on the previous year’s assessed valuation. The Nassau County Tax Assessor determines your home’s value by comparing it to similar homes which have recently sold nearby.
Tax Exemptions
Tax exemptions are a government program that lowers the tax owed on a property. There are two types of exemptions: those that can be granted by the IRS and those that must be approved by local governments. If you’re interested in potentially claiming an exemption for your home, it’s important to understand what type of exemption you qualify for and how this might affect any future sale or investment opportunities.
The IRS has a surprising list of tax exemptions that you may not be aware of. Many homeowners qualify for exemptions including the home office and energy efficiency credits. If you’re selling your home, don’t forget to check out the capital gains exclusion which can save you up to $250,000 in taxes on the profit from selling your primary residence if it’s been owned and used as a principal residence for at least two years. Investors also have some great incentives like 1031 exchanges and depreciation deductions with bonus depreciation (which is set to expire at the end of 2018).
Exemptions for Veterans
In order to better serve military veterans, the IRS has created a list of property tax exemptions that apply specifically to those who have served in the United States Armed Forces. The IRS has also created a special exemption to ease the burden of property taxes on those with low incomes. This exemption is only available to certain veterans who receive assistance from the Veterans Administration (VA).
The following are the qualifications that an individual must meet in order to be eligible. If you are unsure, please consult a certified public accountant or financial advisor.
-The veteran served at least 90 days of active duty during wartime or 181 consecutive days of active duty other than wartime and was discharged under honorable conditions
-The veteran served at least 6 years of continuous active duty with at least one day during wartime, and who retired from service with either a 100% disability rating or who received an Honorable Discharge after serving 20 years of total military service
-The veteran is currently on terminal leave pending discharge from military service based on hardship or injury, has not been released from service under other than honorable conditions, or is otherwise entitled to receive an Honorable Discharge
-If the veteran has never received VA compensation, he/she must have been discharged from service for a disability incurred in the line of duty as determined by a branch of the U.S. Armed Forces. The disability must have either been rated at 30% or higher or resulted in the veteran being retired from service with 20 years or more of total military service. In addition, it must have been determined that the injury was at least as likely as not related to his/her military service, and if so however due to circumstances beyond their control they were discharged.
Exemptions for Senior Citizens
The senior citizen tax exemption is an important benefit for seniors who are looking to sell their homes. The tax exemptions vary by state, but in general, the exemptions will apply to property taxes and allow seniors to keep more money from the sale of their homes. It’s important that you consult with your accountant before making any decisions about this tax law. The senior citizen exemption is a nice benefit that can help lower your taxes by up to $7,900 per year.
Senior citizens are eligible for tax exemptions on their primary residence. In order to qualify, the individual must be at least 65 years old and have lived in the home as a principal residence for 10 or more consecutive years. The property can also not exceed $500,000 in value.
Exemptions for Volunteer Firefighters and Ambulance Workers
If you are a volunteer firefighter or ambulance worker you may be eligible for deductions that will reduce your taxable income by up to $10,000 per year depending on how much money you make from your job outside of volunteering. The most important thing to remember when claiming this exemption is that if the only reason you are taking the deduction is because of your volunteer work then there must be some other activity with respect to which the individual volunteers as well as performs services as an employee.
These individuals are also exempt from paying Social Security taxes on these types of wages and salaries which saves them an additional 6.2% (FICA) tax on all earnings up to $128,400 per year (in 2018). The last exemption offered by the IRS is if you provide your own vehicle for use during volunteer activities; then you can claim depreciation on it using MACRS rules which usually provides a deduction for the first few years of ownership. However, this deduction is not available for vehicles used exclusively in volunteer activities and the depreciation must be calculated based on the percentage of personal use.
Exemptions for People with Limited Income and Disabilities
If you have a limited income or disability, then you may be eligible for some tax exemptions that will save you money. Some of these exemptions include: the Senior Citizen Rent Increase Exemption (SCRIE) and the Disabled Veteran Tax Exemption (DVET). The SCRIE exempts seniors from paying rent increases on their primary residence if they are 62 years old, don’t earn more than $1,000 per month and spend at least $2,000 per year on housing costs.
The IRS provides a number of tax exemptions and deductions for people with disabilities, limited income, or both, which include the following:
–Special Needs Trusts are exempt from federal taxes if they meet certain requirements
-The first $2,400 in earnings is not taxed for people who have been disabled since before age 26
-Earnings up to $12,000 are not taxed for those who are blind or over 65 years old. Earnings that exceed this amount are subject to taxation at the normal rate. All other taxpayers must pay taxes on all their earnings regardless of disability status.
Summary
Property taxes are one of the many expenses that come with owning a home. In most cases, property taxes are based on the value of your home and how much you paid for it when you bought it. The rates vary from state to state but they can go up to 1% or more in some counties.
It’s important to know what tax credits apply to you because there could be substantial savings! When calculating property taxes, make sure that special assessments such as fire prevention fees or sewer charges aren’t included in the total amount owed. Property taxes are an important part of homeownership. They help keep the local community up and running, while also helping to maintain your property. The amount you pay varies depending on where you live and what type of house or condo you own. It is always a good idea to look into this before making any major decisions about buying or selling your home.
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