The absentee owner surcharge is something you may be familiar with if you own a property or invest in real estate. Some local governments impose this charge on property owners who do not reside there. But what is the absentee owner surcharge exactly, and why is it in place?
The absentee owner surcharge, in short, is a cost that certain local governments impose on property owners who do not reside on the property. Usually, this cost is tacked on top of the monthly property tax bill. The justification for the premium is that non-resident owners might not be as invested in the neighborhood as owners who reside there, and as a result, they have to pay a greater cost to make up for any harm they might do.
The specific guidelines and laws governing the absentee owner surcharge differ depending on the location. Depending on the region, the surcharge might be applied whether or not the property is occupied. In certain places, it might only be applied if the property is rented out. The surcharge’s cost might also differ significantly, from a few percentage points of the usual tax bill to as much as several hundred dollars annually.
Absentee owner surcharges are something to keep in mind because they aren’t always permitted. There are regulations in existence in some states or municipalities that forbid local governments from imposing such levies. Do your homework and find out the regulations in your region before presuming that you will be charged an absentee owner surcharge.
An absentee trust is yet another such idea. Absentee trusts are typically established by wealthy families or individuals who want to ensure that their property is managed and maintained in a particular way after their death.
An absentee trust’s primary benefit is that it enables property to be held in trust for multiple generations without requiring that each generation acquire legal ownership of the land. For families who wish to guarantee that their property stays in the family for many years to come, this can be a beneficial instrument.
The absentee owner surcharge, to sum up, is a cost that certain local governments impose on property owners who do not reside on the property. It’s crucial to conduct research and learn the regulations in your location as the specifics of this fee’s restrictions might vary greatly. A related idea called absentee trusts can also be a helpful tool for families that wish to guarantee that their property will stay in the family for many years to come.