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If you are a gainfully employed adult or teen, you are probably already familiar with the taxes that get taken out of your paycheck each month. Even young children learn quickly that a $1.00 toy actually costs slightly more, due to the sales tax that they have to pay out of their hard-earned allowance.
Homeowners have additional taxes that they have to pay along with the cost of their home. The rate varies by region and the exact use of those tax dollars is determined by the local and state government. Property taxes most often go to pay for things like schools, road repair, community improvements, and other functions of local government. This is one of the reasons that the rates can vary so widely.
If you have a mortgage
If you make monthly payments to a lender, your property taxes are most likely included in that payment. Every month, a portion of your check is set aside by the lender in a special escrow account. When the tax bill comes, it is sent to the lender. They pay the bill using the escrow account money specifically designated for that purpose. If there is extra, you get a check at the end of the year! If there isn’t enough, you may owe them money or face a slight increase in your monthly payments going forward.
If you own your home free and clear
If you have paid off your home, the responsibility to pay property taxes falls to you, the homeowner. Once the official record is changed showing that you now own your home without a mortgage, the government will send all future tax bills directly to you. You can expect to get them every 6 months. This can be a fairly large amount, depending on the value of your home and the taxes in your area. You can estimate what you will owe so that you can be prepared when the bill comes.