Taxes and Assessments

When you own property, you will have to pay real estate taxes. There are two types of real estate taxes or assessments that our local government sometimes will assess against real estate. The first one is called the general assessment tax. The general assessment tax is a tax on all of your land plus improvements, which would be, for example, a house that you build on the land. So, if you buy a vacant lot, you will pay real estate taxes on the value of that vacant lot. Also, if you build a house on that lot, you will also pay real estate taxes on the value of the house. Taxes are typically assessed on what's called an ad valorem basis, which means based on value. So, the more value you have in the property, the more you will pay in real estate taxes. A different type of assessment or real estate tax is called a special assessment tax. These are for improvements that benefit certain properties, such as sewers and sidewalks. If a brand new sewer line or a sidewalk goes into an area, just those homes that are benefited, we'll pay the special assessment tax to cover the cost of that improvement. 

When considering a particular home, do some research regarding the ad valorem tax rate and any bonds or assessments that may apply to that property. You can get this information on the county assessor’s Website and search for tax records for that particular property address. The current tax year’s data is also usually disclosed from seller to buyer during escrow. This way, you can plan your monthly budget and ensure you can handle the true, total costs of ownership -- beyond just the mortgage payment.

Direct assessments. Unlike ad valorem property taxes, bonds and direct assessments are flat fees imposed on each parcel of real estate in an area after a city- or district-wide vote, in order to fund various services for that area not covered (or insufficiently funded) by property tax revenue. Some common public projects funded by direct assessments and bonds are: 

• street landscaping and lighting
• public transportation
• library services
• vector control (i.e., pest control)
• parks and recreation
• violence prevention and increased police presence
• local schools