Whether you already own a property or you’re considering investing in one, it’s important to know the property taxes you’ll be responsible for. These taxes can vary depending on the type of home, size, value and location of the home. Single family and multifamily homes can also be taxed differently. Here are a few things to consider before choosing between the two.
Differences for Property Taxes
In most locations, single family and multi family homes are not taxed with the same structure. A study done by the National Multi Housing Council has shown that multi-family homes often pay more in property taxes. Property taxes for multi-family homes tend to be some of the most expensive.
Why Choose a Multi Family Home?
While the tax structure is different compared to single family homes and owners of multi family properties often pay more, these properties do come with plenty of advantages. Often, the per unit cost is lower. The maintenance costs may be more affordable per unit, as well, since units will share walls.
Potentially Makes Property Taxes Easier
It’s also possible for a multi family property to make property taxes easier. Instead of paying separate tax bills for properties, owners of multifamily properties will pay one tax bill covering all units. The tax bill will likely be a higher rate compared to single family dwellings, but there can be more efficiency in management.
Why Choose a Single Family Home?
Of course, as there are benefits to multi family properties, single family homes come with plenty of advantages, too. It’s easier to find a single family home in a quieter neighborhood and tenants tend to stay in these homes longer compared to multi family homes. Property taxes are often lower for single family homes, as well.
There are several factors to consider when looking at the differences between investing in a single family home or a multi family property. It’s best to speak with a property tax professional before making the final choice. In some cases, the current tax bill may not be correct, which could sway your decision one way or another. Make sure a tax professional looks at the tax assessment and gives you the proper numbers before you make your investment decision.