If you missed the article last week about the family that chose the wrong lender and ended up a mortgage payment that was $200 per month higher than is should have been, here’s the link to read the story:
I didn’t add the other 1-2 punch that caused this family to have an even higher monthly payment than they should have – again all because of a lack of professionalism and caring.
One of the most important forms you need to complete and send in when you buy your new owner-occupant property is the form you send to the county claiming the owner-occupant tax exemption. Each island has one, and each affords a varying break on the property taxes you will pay.
In the case of John & Nancy, the place they bought was previously owned by a retired husband and wife. Being of a wonderful older age, they received the maximum property tax break from the county. If you haven’t guessed by this point in the story, no one involved in the transaction told John & Nancy anything about filing the property tax exemption form. So not only did the huge deduction for the previous owners go away earlier this month, they also missed out on getting their rightful tax break as well. It was a huge shock to both of them when all of a sudden their property taxes jumped up a couple hundred dollars a month.
What angers me is that neither their mortgage person, their real estate person, nor anyone at the escrow company ever told them anything about property taxes and the importance to file the exemption form. It angers me even more knowing first this is not the first occurrence of this story I have come across.
As I mentioned above, the tax break afforded homeowners is different for each county. There are also more exemptions other than those for owner-occupants. If you are a senior citizen, the exemption for being an owner-occupant goes way up. Disabled Veterans are exempt from all property taxes except the minimum amount of $300.
One other designation that could potentially save you thousands each year on Oahu is if your property is valued at over $1,000,000. A couple of years ago our county wanted to sock it to the “rich” that don’t live here. If you own a property worth over $1,000,000 and don’t file the owner-occupant exemption form, your property is placed in a different property class, and you guessed it – a higher tax rate. If my clients John & Nancy had their same scenario on Oahu, the tax difference was $6,000 per year! Unless the county receives your exemption request, they are going to assume the worst for you and best for the county’s tax coffers and assess you the higher rate. So even if you live in the home, make sure you file your exemption.
Again, if you missed last week’s article, click the link above and read it. I cannot stress how important it is to find a knowledgeable and professional team (real estate agent, mortgage originator, escrow/title officer) to look out for your best interest. Don’t think that’s an automatic……..