Q: We found a fantastic house in a nice area of northeastern Illinois.
The sellers were originally asking $350,000 but have come down to $300,000 and have even said they would accept $290,000.
The catch is that the property lies between two taxing bodies, so property taxes run about $9,000 vs. the $4,000 the neighbors pay for property taxes.
Even if we could get this house for $290,000, wouldn’t we be asking for problems in the future when it comes time to sell? I know we’d buy the house at a discount, but would we have to sell it for even less five years from now due to the tax situation?
A: I think high property taxes are a red flag for future buyers no matter where you live. And, you’re wise to pay attention to the problem now.
As far as taxes go, it sounds like you’re double-paying taxes. Talk to the tax authorities in both communities to determine whether there’s an error in how property taxes are being computed on the home. You might also consult an attorney who’s specializing in tax matters to see if there’s a way to opt out of one of the taxes, or at least reduce the amount so your total is comparable to the taxes paid by your neighbors. (Perhaps you could pay a portion to one taxing authority and another portion to the other.)
Since you’d be buying the home at a discount, the odds are good that you’d make money on it down the line – even more if you can resolve the tax standing of the property.
Nov. 20, 2003.