Property taxes are a major expense, often forgotten when buying a home. They can cost you thousands of dollars per year. But property taxes are not the same for like properties or owners.

Property taxes provide much of the revenue for local and state governments. When property values go up, property tax collections also go up, which means that there are additional dollars for public services and schools -- and even tax refunds. If property values decline, the government programs are short and there is pressure to raise your taxes to make up for the deficits.

How much you pay in property taxes depends on the value of your home and local policies. In most cases, the property value is established by the government assessor. Once the value is set the tax rate is applied. For example, if the tax rate is $1.50 for each $100 of value, then a $100,000 home would have an annual tax bill of $1,500 or $125 each month.

You should ask some questions about property taxes when looking to buy a home, including:

-What value is used to assess the property taxes? You might think that the current market value would be used, but that's not always the case. In many areas, circuit breaker programs limit the amount to which you can be taxed. Another approach is to apply the tax rate on a portion of the assessed value and not the full worth of the property.

-What are the current owners paying in property taxes? Is this consistent with neighboring properties of equal size and condition. If it is different, why?

-How will property taxes affect your ability to get a mortgage? Lenders look at many different measures to qualify you for a mortgage. One of the most important is the percentage of the monthly income in relation to the amount spent each month for mortgage interest, principal, property taxes and insurance, also called your PITI. Lower property tax bills free up more money for other parts of the PITI.

-Has the tax bill been appealed. Values by tax assessors can be questioned if the owners feel that the estimates are too high -- for example, if the math was wrong or an incorrect schedule was applied. Local assessment offices can help you with your appeal.

-Are you or the current owners eligible to an exemption?

-Can property taxes be deferred?

-What are the income tax benefits of property tax payments?

- Will the sale trigger a different tax bill than the current one?

-How often are assessments made?

Martin Lukac, represents, #1 Loans USA(http://www.1LoansUSA.com), a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. For mortgage rates please visit http://www.RateEmpire.com