Tuesday, August 4, 2009

Mortgage Payments & Taxes - Change is a-comin'!!


As The Woodlands strives toward becoming a city and starting this year, you will no longer receive a separate fee for the Homeowner's Association. When your tax bill for 2009 arrives in October, it will include the new Woodlands Township ad valorem property tax that will be used to fund the 2010 community services previously handled by the Community Associations of The Woodlands.

How will this affect your taxes?

If you have NOT been escrowing (for insurance, taxes and Association fees), then you will receive one less bill, and you will see that the Montgomery County tax statement includes this Woodlands Township ad valorem property tax.

If your mortgage company HAS been escrowing for your Association fee, they will no longer be receiving that as a separate bill, but will see it included in the county tax statement. There may be some adjustment in your monthly bill due to this.

BE AWARE, however, that if your mortgage company escrows for taxes and insurance but NOT Association fees (very common!), the fund may not have sufficient funds to pay all of the annual taxes now due. Your current escrow account will now have to pay The Woodlands ad valorem tax, but it did not previously cover Association fees, which the tax is replacing. In this case, the mortgage company will pay the amount due, but your escrow account may end up short at the end of the year. Please contact your mortgage company if you think that this may affect you!

The great news is that what used to be a non-tax-deductable fee has now become a tax - deductable on your income tax!

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