To answer the tax question - the tax base will be set on the sale price of the home. If the state does not automatically reset the price then you can contact the tax board to have them do it.
When you purchase a property and close an escrow, you will be paying the property for the remainder of the tax period, per the previous home ownerâ€™s tax base.
Home owners are not taxed based on what was the contract price or sales price was or what the tax was for the previous home owner. When a home ownership changes, County Assessorâ€™s office will have a field review done, for evaluation of the price of the property for the purpose of the tax calculation. What ever the Assessorâ€™s office appraises the property at that will be your new tax base.
If you buy a property in todayâ€™s market, you may end up getting a tax rebate instead of tax supplement bill to pay.
So you will not have to re-appraise the property, it will be done for you by county assessorâ€™s office. If you think the amount they computed was incorrect you can always
call or write them with the current comparable market analysis and request them to correct it.
Go ahead and buy a REO without property tax fear. You will only be paying taxes per the current market value of the property.
If you need assistant with locating REO please go to my website at
http://www.HomesByCharo.com and n left click on Bank owned properties.
I am known as a great negotiator. Feel free to call me at 510-381-2105
I will be happy to help you realize your dream of investment property
I wish you good luck
These are great concerns and questions that most first time REO buyers ask. Carl is correct the bank needs to transfer to you clear title and any back property tax could very well have not been paid by the previous owners. The new tax amount for Alameda county is always 1.25% of the purchase price or $1.25 per $1,000.00 purchased so buying REO property makes sense. You should be getting the property below market value and only paying tax on the new purchase price. Now if you lived in the neighborhood where a lot of REO property is being sold and below what you paid for the home say even 1 year ago you can request a reassessment of your current property tax based on the declining value of property in your area. The property tax issue is always the big question in a buyers mind when thinking about buying a new home but remember these tax are deductable on your tax return each year.
There are a couple of issues here. First of all, for REOs in this area, the unpaid property taxes that may be showing as a lien on the property will be paid by the bank upon close of escrow. An REO will be delivered to you with a totally clear title.
Secondly, when you get the preliminary title report or examine the public tax records, the property tax amount shown is for the PREVIOUS purchase price. In this area, the annual property taxes are always $1.25 per thousand dollars of purchase price. As an example, your annual property tax bill for a home costing $400,000.00 will be $5,000.00. Property taxes are automatically re-assessed at the point of sale.
Unfortunately, the previous property tax dollar amount is the number that will be used to computer the closing costs. HOWEVER, your property will be reassessed and in a few months you will get a supplemental tax bill reflecting the lower taxes. In previous years, as property prices were rapidly increasing, the supplemental tax bill came as a shock to many home owners who did not understand why they had to pay â€œmoreâ€ taxes. In fact, they were initialed billed at the previous rate, and the supplemental tax bill caught them up to where they should be.
Because of the current decreases in property value, you will probably get a refund when your supplemental tax bill shows up. Bottom line, you will ultimately not pay more than your should for property taxes. You will only pay from the time you occupy the property and the rate will always be $1.25 per thousand dollars of purchase price.