Purpose

• Property taxes are collected by your county treasurer-tax collector on behalf of the state, city, county and schools. The money is used to support the infrastructure of your community, such as roads, parks, libraries and police and fire services. In addition to your regularly assessed property taxes, you may have to pay an additional special assessment, which provide funds for items such as sidewalks and sewers, that directly benefit your property and community.
  
  

Amount

• The amount of your tax bill depends on the value of your property in most jurisdictions. Many states will reassess your home at regular intervals, such as every two to four years. Other states, such as California, may have passed legislation that caps an annual increase and allows reassessment only when there is a change in ownership or completion of new construction. A general rule of thumb is to estimate your tax bill at 1 to 2 percent of the purchase price the first year that you own it. To determine an accurate property tax amount before you purchase a home, call the county treasurer-tax collector about the specific house that you are interested in buying. The office will give you the tax rate and you can multiply it by the purchase amount to estimate your monthly and annual property tax expense.
  
  

Payment Frequency

• How often you pay your property tax bill depends on your jurisdiction. Your area may require that you pay the entire bill in one lump sum. Some allow you to break it up into two or four equal payments. This is imperative to know because, if you move from an area that allows you to send several payments to another jurisdiction, where the property taxes are due at one time, you may inadvertently miss a payment and risk penalties and fees, or even a tax lien, as a result.
  
  

Escrow Account

• Regardless of when your property taxes are due, your mortgage company may require you to pay them every month with your mortgage payment. The money is then placed into an escrow, also known as impound, account. When your property tax bill is due, your mortgage company pays it from the fund established for you. Most companies require this with loans that are worth more than 80 percent of the value of the home. Lenders do not want to lose the collateral for the loan to the government for non-payment of property taxes. Therefore, you will have to pay your taxes every month to your mortgage company.