New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
Hello Team,
I just closed a property in Huntsville, AL and observed that the property has unusually little higher taxes than other homes. I noticed that most of the SFH with 3/2 are in the range of 400-500 per year with price point around 100K. The owner had this purchased for 85K or so in 2018 and from 2019 they are paying around 800+ per year. Current year quotes 920+ or so. I just closed this for 120K or so. I am wondering if this would go even higher.
Anyone has any insight on why this property alone would be double tax compare to other homes in the area? Also, any tips to challenge this with the county? Is it worth doing or will it backfire? Thanks!
Huntsville, AL · Member since 2018 · 577 posts · 864 votes
5y
@Murali Jesudoss - the $400 to $500 range per year are Alabama homestead exemption rates - aka owner occupied properties. In Alabama, your primary residence has a discounted rate via the homestead declaration.
The higher rate of $800 to $1000 for the similar properties would be for non-homestead properties, such as rental/investment properties.
There is nothing to challenge with the county on this, as this is routine policy here.
Huntsville, AL · Member since 2018 · 577 posts · 864 votes
5y
@Murali Jesudoss - the $400 to $500 range per year are Alabama homestead exemption rates - aka owner occupied properties. In Alabama, your primary residence has a discounted rate via the homestead declaration.
The higher rate of $800 to $1000 for the similar properties would be for non-homestead properties, such as rental/investment properties.
There is nothing to challenge with the county on this, as this is routine policy here.
New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
5y
@Michael S. Thanks for the explanation. Interesting to know. I am not clear, if the owner rented or stayed prior to my purchase and he is already paying higher. The deal was from a wholesaler and I thought he bought it from a owner. Not sure. I will check with my realtor about homestead exception as well. I heard South Carolina charges triple tax for rents and low taxes for owners. I did not realize similar rule exists in Huntsville. I should explore more on this as that was one of key reasons, I focused on this marker :-) Happy long weekend!
Rental Property Investor · Huntsville, AL · Member since 2015 · 181 posts · 136 votes
5y
It's what Michael S said. If it wasn't a rental, the owner might have been a moron who didn't file for the exemption and paid extra in taxes every year.