Property Taxes For Rental Properties by truth4reviews


									Property Taxes For Rental Properties

Property taxes for rental properties are normally higher than single-
family properties. This causes much confusion for property owners in any
state. They cannot understand why they are subject to higher property
taxes since most are not making a profit on the properties in question.
With people buying two family houses to help with the mortgage payment
and property taxes, there are some frustrations over why they have to pay
higher property taxes. Many property owners feel they are being singled
out for trying to own a property for their family while providing housing
for someone else as well.

The general rule for property taxes is that if you have a two family
home, you are paying property taxes for two families in that taxing
district. The home will be compared to other homes similar in structure
as well as recently bought and sold homes to arrive at a fair assessed
value. This however does not affect your status for taxes, the rates
applied by the taxing committee is where your assessed value is used to
calculate the tax due on the property. This is where they get you for
owning a two family home. You can find out more information at your local
taxing office as to how they calculate tax rates for single and two
family houses.

Even if you are paying more property tax, you have more tax deductions
allowed than a single-family homeowner does. This may were the taxing
office justifies there taxing structure. Property taxes for rental
properties are higher but you can claim depreciation on appliances if you
supply them in the rental as well as any other furnishings. You also are
able to deduct any advertising expenses, repairs, maintenance and weather
related upgrades. You can also deduct insurance, cleaning expenses and
supplies needed to keep the rental unit livable. With the added
deductions that a single-family homeowner cannot deduct, the taxing
situation may be evenly split.

Another thing to keep in mind when buying a two family house verses a
single family house is that you have someone to help you pay the property
taxes were a single family owner does not. If you do not make any type of
profit, it may be because you are not charging enough for rent. Remember
that the rent you collect is claim on your income taxes as well. Two
family homeowners do have more advantages than a single-family homeowner,
but not where property taxes are concerned.

If you are paying property taxes on rental properties that you live in
one unit, you can talk with the assessors office to see of there is a
lower assessment value for owner occupied rental properties. In some
states, there are provisions for two family dwellings if the property
owner occupies one unit. You just need to check with your particular
community to see if there are any special guidelines for this type of
situation. You can also view other property owner's tax bills at the
assessor's office to compare assessed values and tax liabilities.

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