Current Tax Levy affect on rental property investment

3 Replies

I am looking at properties in El Paso Texas by using the city of El Paso's website to look up taxes paid yearly on different properties I am analyzing. I see 1 property, a quadruplex, has a "current tax levy" of $7,639.98 and that the owner paid $1,289.89 in February of this year. What  is a "current tax levy" and does that have any effect on me if I choose to buy the property?  Is the tax levy the amount owed in taxes every year or what is still owed?

Thank you,

Hello @Dustin Nygard ,

I am glad you are looking at the taxes before buying a property, It can be a deal breaker or a deal maker in El Paso, It all depends how the city has assessed it. Now, the difference between NM and TX, is that in TX you do not have to report back to the city at how much did you buy the property whereas in NM the buyer is responsible to do so.

Now to answer your question, Current Tax Levy is the amount that is due for this year's taxes which are to be paid before the 31st of January of 2020 without having to pay any interest charges or late fees. If you were to buy the 4-plex you will only be liable for the prorated amount of $7,639.98 entirely depending on when you close. i.e. the seller will pay his share (Jan - August) and you will pay your share of the bill (Sept - Dec). Make sure you ask for an estoppel certificate before you close and have all of the tenants sign it, as well as get all of the leases and read them. A lot of the time REALTORs inflate the numbers just to sell the units.

Good luck!

Any questions I am here to help

Thanks

Yas

@Dustin Nygard ,

You got a great answer from @Yasir Einaudi about the tax levy.

While you are looking at the property taxes, I would also take a look and see if the owners show that tax rate as their primary residence.

I know we have seen clients who bought a property thinking that the taxes would be $X per year since that is what the other owner paid, and then find out that the other owner was getting a tax break since it was their primary residence.

Good luck!!

Hi! I was just looking up Tax Levy on the website as I prepare for the Auction next week and what a coincidence I find the exact answer with someone from the same city! So basically would Taxes Due and Levy be the same thing in some cases?