Property tax abatement programs can be helpful to homebuyers in several ways. While they can help you save money long-term, buying a property with a tax abatement can have potential downsides. Here are some key things about property tax abatements for buyers to consider:
Property tax abatement programs are offered by some cities and counties to significantly reduce--or eliminate--property taxes on a home with major improvements. You can either apply for an abatement on a property you already own, or purchase a home with an abatement already established. If approved, you'll be able to pay taxes based on the value of the home before the improvements, potentially saving significant amounts of money.
The savings on your property taxes are the largest benefit to tax abatement programs. If you're planning to buy a new home, finding a property with a tax abatement means finding a great deal on a home you might not be able to afford otherwise. Higher equity from improvements and rehabilitation equals higher property taxes, but purchasing a home with an abatement allows you to pay based on the value before the changes.
There are some drawbacks to tax abatement programs homebuyers should be aware of. The primary downside is most qualifying homes for tax abatement are in neighborhoods with lower demand. Tax abatement programs are often used as incentives for buyers to help with urban development and revitalization.
The other major issue tax abatement can cause comes when the abatement period ends. If you live in the new home beyond the abatement deadline, your property taxes could suddenly increase. Staying aware of this deadline is crucial for avoiding unpleasant surprises on your annual tax bill.
While there are disadvantages to tax abatement, it can be an excellent opportunity for many homebuyers. Keep these factors in mind when considering your options for buying your dream home.
Mark comes to us with extensive experience in the real estate industry with over 20 years of experience working with buyers, sellers, and builders. Mark has been an active member of RACM, REALTOR Association of Central Massachusetts, since 2001 and has built a formidable reputation in Worcester county.
Consistently ranked among the top 10 Realtors in Worcester county with career sales totaling 300 million in pending and sold, Mark is an extremely valuable resource for those getting ready to list their home, purchase a new home, or build from the ground up.
As a Shrewsbury native, and a seasoned real estate professional, Mark joined Andrew Abu REALTORS and works side-by-side with a talented team of industry experts who specialize in market trends and local market stats, to keep ahead of the curve and combine home marketing with innovative technology and forward-thinking. His valued reputation with client's and business partners for the past two decades and proven success with record setting sales, will leave you in capable hands during any real estate transaction.
