What to know about property taxes after purchasing a home

by Kristen Costa 07/31/2024

Millions of homeowners dedicate their income to mortgage payments and property taxes every year. If you intend to purchase a home in the future, knowing how mortgage payments and property taxes work and intertwine can give you a better understanding of where your money goes. 


How does property tax work?

Property tax is collected by your local government and allocated to provide resources for citizens such as state parks, schools, road improvement and more. 

The property tax amount is calculated based on the local property tax rate and the value of your home. 


Mortgages & property taxes

Your mortgage insurance includes more than the raw amount of your home. In addition to the cost of the home borrowed, the amount also covers interest rates, mortgage insurance, homeowners insurance and the property tax for your district. 

Your mortgage lender estimates the amount of property tax you’ll owe at the end of the year based on the property tax rate of your area and divides it by 12. 

This amount is then added into your monthly mortgage payments. If you underpay, you’ll owe money to the government, but if you overpay, you’ll receive a tax refund. 


What about after I pay off my house?

Paying off your mortgage is a gradual process worthy of celebration. However, once the house is paid off, it’s essential to remember yearly property taxes are still due. 

To stay on top of payments, you can contact your local government, and they can invoice the amount you owe each year. They may also offer you multiple payment options, as some require one lump sum per year, while others may offer quarterly payments.  

Understanding your property tax options puts you ahead of the game and helps you better understand how your money helps to improve your community’s overall well-being. 

About the Author
Author

Kristen Costa

I've been listing and selling in Wilmington and surrounding areas since 1987 and have been affiliated with Fudge Properties since 2007. I have a strong reputation for outstanding quality of both work and interpersonal relationships, knowing what needs to be done and how to elicit cooperation for getting it done. I'm also proficient and knowledgeable about the Mass Housing program guidelines, successfully completing numerous housing lotteries for first time home buyers, over 55 buyers and renters. Whether you're buying or selling, I can help you get the best deal. Just looking? That's OK. Use my website all you like, but you'll have to create a free account to unlock all the best search features. Once you sign up, you'll be able to save listings, save your search criteria, get automated email updates for new homes matching your saved search criteria, and more. Good luck on your house hunt! I hope to hear from you soon.