Avoid Property Tax Pitfalls, Save Money and Take Advantage of Local Rules Today
Property taxes are an important detail when buying a vacation home, but if you’re not careful they can become an “out of sight out of mind” kind of detail. Part of our job is to inform home buyers of property tax implications when they’re buying a new home. Here are some key points to keep in mind when considering the property taxes on your cabin, lake house, or vacation property.
Calculating Property Taxes on Vacation Properties
The calculation of property taxes on a vacation property depends on various factors such as the property’s value, location, and any special tax levies in the area. The county assessor’s office typically determines the value of your individual property and they also set the tax rate. The tax rate is applied to the assessed value of the property to calculate the property tax amount you owe each year.
Renting Out Your Vacation Home and Tax Implications
If you plan to rent out your vacation home, there are additional tax implications to consider. Depending on how often and for how long you rent out the property, you may be subject to state and local occupancy taxes, as well as income taxes on the rental income you receive. It’s important to do your research and consult with a tax professional to understand your obligations and to ensure that you are properly reporting any rental income.
Regional Property Taxes on Cabins in Northern Wisconsin
In Northern Wisconsin, properties are subject to general property taxes, as well as specific taxes that apply to cabins or second homes. For example, some counties may impose a “Forest Crop Law” tax, which applies to land that is used for growing trees. In other cases, properties located near water sources or wetlands may be subject to additional taxes.
Tips for Lowering Your Property Taxes
There are some strategies to potentially lower your property taxes on a vacation property. One approach is to challenge the property assessment if you feel that the assessed value is too high. Additionally, you can explore any available exemptions or tax credits that may apply to your property, such as those for senior citizens, veterans or disabled individuals.
Understanding property taxes on vacation properties is essential for any property owner. They’re also a complicated factor that varies based on jurisdiction and many components of a given property. The best approach is to consult with your local government or a tax professional for more specific information about your property tax situation. By knowing how taxes are applied to your home, you can better plan and budget for the costs associated with owning a vacation property.