What to Expect with Property Taxes

As a current or prospective owner of Phoenix real estate, there are many important details you’ll want to know regarding your financial responsibilities. Property taxes are one of those details, and planning for them appropriately will help you stay financially healthy. Here’s what you should know about paying property taxes in our fine valley.

Payment Schedules

The most important thing you’ll need to know about your property taxes is when they are due. Maricopa County, which governs most of the valley, typically has two due dates per year. At least half of your total property taxes are due on each of these dates. Of course, you may pay them in full to get them out of the way, but otherwise your half-year taxes are due no later than October 1 and May 1. If your taxes are not paid in a timely manner, the county may place a lien on your property or even sell it to recover past-due tax debts so it’s important to stay current.

Escrowed Taxes

Many buyers of Phoenix real estate are required to pay monthly into a savings (escrow) account that is then used to pay property taxes and homeowner’s insurance. Your loan lender holds this fund and then disburses the payments according to their due dates. Some lenders will send the check directly to you to forward to the county, while others will pay the county directly for the property taxes you owe. Ask your lender in advance how they handle tax payments, so that you can be aware of your responsibilities.

Assessments

Owners of Phoenix real estate obviously hope for their property value to increase. This can help build equity in the property and ultimately provide a higher return on investment. While these are positive things, one drawback to increasing property value is potentially higher taxes. When purchasing a home, the previous year’s tax rate is used to calculate what you should owe in the future. However, it’s very common for the county to reevaluate home values on a periodic basis.

Typically, you’ll receive a postcard from the county prior to a reassessment. Once it’s been completed you will also have the opportunity to appeal if you feel that the assessed value is higher than the true market value. In the case of an increase notification, you’ll want to sock away the difference to either your escrow account or separate savings account to manage the shortage when the bill comes.

Property tax is an obligatory part of owning Phoenix real estate and one that you should seek to understand. Working with an educated and experienced realtor can ensure that you know your responsibilities and what your financial future may hold as it pertains to your home and land.