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Michigan Sales Taxes Article
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Paying Taxes on Sales of Houses That Are For Sale
from:No matter what the price of the house you want to buy, there will be a certain amount of taxes on sales of houses for sale. In most cases the taxes are paid by the buyer, but sometimes buyer and seller will negotiate when it comes to paying taxes on sales of houses for sale in order give the buyer a break on the settlement costs. That can be rather hefty sum of money if you don't qualify for a no down payment mortgage such as a Veterans' Administration guaranteed loan. Even at a minimal 10 per cent, a $150,000 home is going to require a $15,000 down payment in addition to the settlement costs. With the price of homes today, the average first time buyer finds it difficult to save the money for both down payment and settlement costs without some help from the seller. Therefore, it is quite common for buyer and seller to make agreements concerning paying taxes on sales of houses for sale in order for the buyer to be able to afford the house.
The amount of taxes on sales of houses for sale depends where you live. For example, property taxes in some areas are levied by state, county, and city governments while in other areas only the states collects taxes on sales of houses for sale. Likewise, some states have a separate school tax while others combine the school tax into the property tax. Before you buy your first house, you want to educate your self in the tax system as it pertains to homeowners so that you don't receive any surprises when it comes time for tax payments for the year. Although this is something the mortgage company will probably pay, you will probably receive the first bill. You may want to look it over and see what you are paying so that you can get an idea how much of a difference it may make in your mortgage payment over the next years.
Another reason you want to review your tax bill each year is so that you know if your house is being properly assessed for taxes. If the figure increases substantially in either direction from year to year, you may want to contact the taxing authority to question it.
On the other hand, you need to be aware how much transfer you are paying at closing. Each state is different, so make sure you do some research and are paying the correct amount. This is also something the buyer usually pays but can be negotiated between buyer and seller.
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