Carlos purchases a home in Taos County in October. At closing, the title company prorates the annual property taxes between the seller and buyer. Carlos later discovers that New Mexico property taxes are paid in arrears in two installments. Which of the following statements correctly describes how New Mexico property tax installments are structured and when they are due?
Correct Answer
A) Taxes are due in two equal installments: the first half by November 10 and the second half by April 10 of the following year.
Under New Mexico law (NMSA 1978, § 7-38-38), property taxes are paid in arrears and are due in two equal installments. The first half is due by November 10, and the second half is due by April 10 of the following year. Understanding this schedule is critical for real estate professionals when prorating taxes at closing, since the tax year runs January 1 through December 31 but payments span into the following calendar year.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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