Understanding Property Tax Rates Can Help Prevent Surprises Down the Road

Many first-time home buyers have already envisioned where they want to live, the number of bedrooms their future home should have, and whether they want to have a big or small yard.  One important detail that is often missed, but should not be ignored, is property taxes. To help families select an appropriate home for their unique living situation, J.Christopher Real Estate Group would like to explain why it is important to consider property tax rates when purchasing a home.

“Property taxes can vary drastically from one home to the next,” said Jarrod C. Lewis, owner of J. Christopher Real Estate Group. “It is a topic that gets little attention even though higher property taxes can add hundreds of dollars to the mortgage bill every month.”

Lewis said it can be especially concerning for individuals who only expected to pay the ‘estimated’ property tax value based on the average tax rate in Rhode Island. These details are usually discussed at closing, and many people will agree to the terms because they do not want to risk losing their dream home.

“Everyone will have a different threshold for how much they are willing to pay to live in a specific area. Families can avoid some surprises down the road if they examine a property’s tax history early on, which is typically viewable with a quick search online,” Lewis said. However, he warns that home buyers should not base their home buying decision solely on property tax rates. It is more important, he says, to simply be aware of this key factor.

Property taxes are determined on the assessed value of a home and the established tax rate by a county or municipality. These taxes are usually collected to maintain public lands within the community, salaries of public servants, and it also helps fund local public school systems.

“If a strong public school system is important to you, it is ultimately up to the home buyer to determine whether they are comfortable paying a higher tax rate,” Lewis said.

Here are the current property tax rates (for owner occupied properties) per every thousand dollars of assessed value for some of the most populous cities in Rhode Island.

  • Providence: $18.80
  • Warwick: $20.80
  • Cranston: $20.29
  • Pawtucket: $20.13

Other popular residential areas in Rhode Island can carry property tax rates of over $26 per thousand dollars of assessed value. To put that into perspective, a home valued at $200,000 in Providence will have an estimated tax bill of $3,760. The same property somewhere else can have a tax bill of over $5,000. Although there are ways to reduce your tax bill, it is generally expected that taxes will increase over time.

J.Christopher Real Estate Group has a team of experienced realtors that can help you select the right home for your family. Whether you are looking to buy or sell a home, call us at 401.830.6906 to schedule an appointment today.