This was my response to a question in the Zillow home buyers’ forum so I thought it would be good to share it here:
I would also suggest basing your search on your property needs and wants, whether it is in the Sebago Lake Region, Portland Maine or any city or town and then look at the actual taxes for the property. Taxes are an expense of home ownership (and some would say an indirect expense in renting as well) but you don’t feel your taxes every day of your life. The right home is the first priority. You may also find that home prices go up and down based on the tax rates. A town with a lower tax rate often has more demand for the exact reason you are asking the question and therefore the home prices tend to be higher. This isn’t always exactly proportionate either. If you have 2 identical houses and the town line sits between them and House #1 has a mortgage payment (without taxes in the payment) of $1200/month and the taxes are $2400/yr ($200/month) the total payment is $1400/month. House #2 has a higher tax rate (let’s say $800/yr higher) so the house has a little less appeal which equates to a lower price and therefore an $1100/month mortgage payment. Now you add in the $3200/yr in taxes ($267/month) and you have a total payment of $1367/month. In this example you would be paying $33/month ($396/yr) less for the same house and effectively the same location.As a final thought from me on this subject, you may also find that the lower tax rate may mean less public services. This may mean that you take your trash to the dump instead of getting curbside pick up, or there may be no sidewalks for your children to ride their bikes on, or the sidewalks don’t get plowed in the winter or the fire dept. is all volunteer, which may result in a higher insurance premium.I think it is more important to find the right house first, then the right community and then look at the total expense instead of shopping by tax rate.
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