Carmel Real Estate News
The Indy Star recently published an article about how some local taxing authorities have temporarily submitted larger than normal tax rates for 2009. Basically what is happening is that the local tax units don’t really know what their budgets are and/or what this years assessments are. Since they don’t really know what they are working with, they overshoot it and then claim they might go down once the final numbers are in.
Regardless of how you feel about the “temporary” inflated numbers, you do need to understand how this can affect you as the buyer or the seller in a real estate transaction during the “black hole” period when we don’t actually know the tax rate.
If you are a seller and you close during the time between the temporary numbers and the real numbers come out, you could end up paying more than your fair share of real estate taxes if you prorate. Why? Because the title company must go off the last known amount of the taxes which will be artificially inflated during this time. There are ways around this in the contract, but it must be done carefully.
If you are a buyer, the exact same situation is in play only you are on the winning side. You could be credited with a tax credit that turns out to be more than the actual seller’s portion of the property taxes.
As it gets towards the end of the year, tax pro-rations can add up and this could mean some pretty serious money if you are not careful. If you are in the market to buy or sell a home in the next few months, make sure you are represented by an agent who fully understands what is going on and can protect your best interests. Having a competent, knowledgeable agent can not only guide you through the process but also save you some serious money.
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Date: Tuesday, October, 14th 2008 @ 09:23:55 AMViews: 775
This blog entry currently has 2 comments posted.
Jennifer
I think really going make a difference on real estate transactions, This taxing change can hit the budgets of the companies dealing in real estate, I think its a very interesting article on this topic
Posted on 2008-11-11 04:49:47
Dan
That's very interesting. I'll have to look into whether or not that is going on here in Myrtle Beach. Definitely information you would want to share with clients.
Posted on 2008-10-31 15:07:59