Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
Ok. So this one is so odd I don't know what to do with it. Tried some basic research but I think its so rare that nothing is popping up.
Here's my situation.
I'm closing on a house on Monday where the property taxes are articifically low because the owner was a senior citizen and had a sr citizen exemption, homestead exemption and sr freeze exemption.
The taxes paid this year were like 1,200. Once I close on this property this year, those will all go away and come next year, I'm going to get stuck paying about 3800 in taxes.
So my dilemma is on the hud statement and the amount they're allocating for the property tax credit.
Should I be able to get a tax credit of 11/12ths of 3800? Or am I stuck with the 1,100 credit and I'll just have to eat the difference?
I kind of understand both sides. Why should the seller be responsible for more taxes than they would have to pay. But why should I not be entitled to the tax credit of the amount of taxes that I will have to pay?
Has anybody ever run into this? If so, do I have any recourse at all here?
That's really strange Mike. Here in Texas, your appraised value and exemptions are set at the beginning, not the end, of the year. Therefore, if the seller has a valid senior exemption in place on January 1, 2015 and I bought the property from the seller in 2015, I would get the benefit of the exemption for that year when I paid the taxes at the end of the year. Is that your situation and you're talking about taxes going up in 2016? Or are you going to lose the exemption the second you purchase and be responsible for increased taxes in 2015?