This Homeowner Expense Costs Me More Than My Mortgage

Believe it or not, there's one expense I grapple with as a homeowner that's more of a burden than my mortgage.

When I bought a home about 12 years ago, I knew that I wouldn't just have a mortgage payment to deal with every month. I'd also have other expenses, like:

• Homeowners insurance
• Property taxes
• Maintenance and repairs

One thing I didn't realize, though, was just how much my property taxes would climb over time. In fact, for many years, I've been spending more on those taxes than on my actual mortgage. Here's why.

Why my property taxes have skyrocketed

I live in New Jersey, which has the dubious honor of having the highest property taxes in the nation. This wasn't a shock to me. I knew when I moved here that my tax bill would be substantial. However, a big reason my property taxes are so high is that I bought a new construction home.

When you buy new construction, you'll almost always have a much higher tax bill than you would for a comparable home that's been around a while. My town doesn't feature a lot of newly built homes. Most of them are well over 50 years old. As such, the five newly built houses on my tiny cul-de-sac most likely have the highest property bills in my entire town.

What made things worse for me on the property-tax front is that I was quoted a certain amount when I signed up to buy my home. Once my home was completed and an assessor could more thoroughly evaluate it, my tax bill rose a good $2,000. In fact, since buying my home 12 years ago, my taxes have gone up around $8,000. That increase alone is more than what some people in other parts of the country pay in property taxes all year.

Why do some homes have higher property taxes than others?

Your property taxes are calculated by taking the assessed value of your home and multiplying it by your local tax rate. If your home is worth $500,000 and your local tax rate is 2%, you're looking at a $10,000 property tax bill.

As mentioned, having a newly built home will result in a higher property tax bill, and the more land your home sits on, the higher your taxes will be as well.

On my end, the tax rate in my town is much higher than the tax rates in most neighboring towns. While I don't enjoy paying sky-high property taxes, I do get the benefit of good schools, local parks, and other amenities. And that helps soften the blow a little bit.

When you look at property listings, you'll generally get to see what a given home's property tax bill looks like. But that won't tell the whole story. Make sure to also look at a home's property tax history. This will clue you in on how often homes in the area are assessed so you can determine your likelihood of your taxes going up over time. Also, some towns have a lower tax rate than others, so no matter what state you move to, it's important to research local tax rates.