Property Taxes and Real Estate Taxes: What is the Difference?
Many people are unaware that when they’re paying their real estate taxes, they are, in fact, paying property taxes. There is a difference in the two terms even though they are used interchangeably. Bend property taxes are calculated on the property’s value, while real estate taxes are calculated on the property’s annual rental value.
Different types of taxes are assessed on real estate. Some states have different rates for tax purposes than others. This makes for a higher or lower cost depending on the state. Purchasing cheaper property may not mean saving money when it comes to taxes.
What should you do with your tax refund?
What are property taxes?
Bend property taxes are local tax, levied by the municipality or county. These taxes help fund public services such as fire and police protection. The tax is collected based on the property’s value, and it varies from place to place. Variation depends on the property’s age and assessed value.
Property taxes were created to generate revenue for local governments without placing burden on residents. However, not everyone is taxed equally.
In Bend, property taxes usually remain at around 0.90%. The federal average is 1.07%.
What are real estate taxes?
Real estate taxes are a tax imposed by local governments for the benefit of the community. Real estate taxes are typically paid in quarterly installments. They are usually calculated as a percentage of the home’s market value.
The homeowner is responsible for paying their real estate taxes to their appropriate government authority.
What you need to know about mortgages
Why should you know the difference?
It is worth understanding the difference between real estate taxes and property taxes before purchasing a home. Taxes are an often overlooked part of the house buying process. This is sometimes because people find the financial aspect difficult to understand. However, knowing the basics is very important if you are looking to buy a property, now or in the future. It is also relevant during tax season if you’re looking to make the most of your deductions.
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