How are Property Taxes Calculated?
Taxes for Modular Homes
Generally, if you own the house and the land, you will pay all taxes associated with your house. However, since we are dealing with modular houses, the tax you pay varies based on local and state laws, especially if you do not own the land.
- Taxes If You Own the Land
If you own the land where your house will be located then your lender may require an escrow or offer you one to pay the property taxes. This means that you will need to pay some taxes into their mortgage escrow account. Your lender will then pay the taxes from the escrow account that both of you created when it is time to pay.
- Taxes If You Do Not Own the Land
If you plan to have the modular home on a rented property, then the taxes you pay will depend on the county or state where you plan to live. If the modular house will not be permanently attached to the land, your lender may require an escrow for the personal tax of the house itself. In some states, the owner of the land may be required to pay the property tax and in other states, you, as the homeowner, are responsible.
If the owner of the land is responsible for tax payments but fails to pay, your modular house could be subject to a tax sale. To reduce the chances of such a scenario, it is good to confirm with the local authorities that the taxes have been paid. Depending on the lender you decide to go with, the property tax may still be needed to be escrowed in your mortgage payment if the owner of the land is responsible for paying property taxes. Some lenders may even need you to pay mortgage escrow payments then issue a refund once they verify that the homeowner has paid the required property tax. To reduce any surprises, you do want to check with your lender about how they go about property taxes.
Tax Exemptions for Modular Homes
Property tax exemption for a modular house can mean a reduction in the total percentage of the total tax bill or just an entire exemption from property taxes. In order to understand about tax exemptions allowed for your house, you need to check with the appraisal district or local tax office and ask about tax exemptions that you qualify for. Tax exemptions can be offered to individuals that served in the military or over a certain age. It is important to check your tax exemptions, as you may already qualify for a reduction of your property tax bill.
Being a homeowner feels great but purchasing or building your first house can be an overwhelming experience. Apart from worrying about how the structure will be put up, you need to consider the amount of property taxes you will be paying. As a modular homeowner, taxes are calculated based on whether you own the land or you do not. If you own the land, you are required to pay all property taxes but if you do not own it, the owner of the land can pay on your behalf. However, you need to check with the local authorities since tax rates vary depending on the state.