property_tax

Property tax is tax due to owning a real estate property, as long as you maintain the ownership. Property tax is calculated based on percentage of a purchase price. Property tax rate varies by state and county although the rate is similar within a state. Louisiana has the lowest property tax which is an average of 0.18% and Hawaii is second lowest with 0.26%.  In California, property tax hovers around 1.1% of the house purchasing price. In states such as Texas and New Jersey, it can be as high as 2.99%. Property tax is usually paid biannually (if paid directly to government) or monthly (if paid through loan lender). Some counties include trash pick-up cost as part of property tax and other counties will bill trash payments separately.

In California, a special form of property tax can be levied to a property, called Mellos Roos. A builder can require future property owners to pay for the public amenities, such as roads and schools, built for the community as Mellos Roos. It is mostly levied on newer homes usually on homes built after 1990. Mellos Roos usually last for 30 years. The monthly Mellos Roos payment can range from less than $100 to over $1,000. Newer homes usually have higher Mellos Roos. Mellos Roos are paid as if they were part of regular property tax.

Any type of property tax is tax deductible with federal government and most states. Check your state website for further details.

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