When you buy and own a home, your local government (typically through what is called a County Tax Collector's office) sends you an annual or semi-annual, lump-sum bill for property taxes. Receiving this bill and paying it are never much fun because most communities bill you just once or twice per year.

Property taxes are typically based on the value of a property. Although an average property tax rate is about 1.5 percent of the purchase price of the property per year, you should understand what the exact rate is in your area. You can call the Tax Collector's office in the town where you're contemplating buying a home and ask what the property tax rate is and what additional fees and assessments may apply.

The current owner's taxes may very well be based upon an outdated and much lower property valuation. Real estate listings may contain information as to what the current property owner is paying in taxes. Your property taxes (if you buy the home) will probably be recalculated based upon the price you paid for the property. If you make a small down payment (typically defined as less than 20 percent of the purchase price), many lenders insist upon property tax and insurance impound accounts. These accounts require you to pay your property taxes and insurance to the lender each month along with your mortgage payment.