So you want your taxes to be low, but you can't have it all.

Your property taxes are calculated based on your assessed value. Everybody wants their taxes to be low but they want their property to value to be high at the same time.

Properties taxes are roughly 2% in Volusia County and based on the assessed value and then exemptions are deducted. The fact that a home is assessed high is a good thing. It shows that the home is worth more based on the land value and the value of the improvements (the house).

I recently had a buyer looking at an Ormond Beach foreclosure property. It was purchased 2 years ago for 780,000 with improvements and is currently assessed at 590,000. They are looking at getting the home for around 500,000. The home is bank owned so there are no homestead exemptions.

The argument is that you will be paying taxes on the $590,000 value with no exemptions but you are purchasing the property well below market and assessed value at $500,000. $90,000 plus the $50,000 in exemptions equals about $2600 more in taxes for the current year. That can have a pretty significant impact on your monthly payment depending on the price.

Let's look at the big picture here. Assessed value is typically 85% of market value. So, you are getting a house that was purchased at $780,000 and the theoretical market value based on the property appraiser is $693,000. You are getting it for $500,000....sounds like a good deal to me.

Call me crazy but you are worried about $2600 in additional taxes for the first year, and realistically it is 6 months now, to get a home for almost $200,000 under market value. Next year you can apply for homestead and you will get the homestead exemption and the assessed value should come down based on the sale price.

Just a hypothetical....Would you rather own a home that is worth $700,000 that you paid $500,000 for, or would you rather gripe about the taxes and own a home that is worth $250,000 that you paid $500,000 for? Yes...your taxes would be lower.

It should seem quite obvious where the deal is. I think people sometimes focus too much on the pennies when they should be looking at the dollars.  Looking for a great deal on local area and Daytona Beach foreclosures? The Dream Homes Team can help determine if your next real estate purchase is worth the investment. Give us a call or send an email.

It's a good life,

Ian Anderson - The Dream Homes Team
Find Daytona Beach foreclosures and more information for home buyers at thedreamhomesteam.com.

Categories: Buying a home