novice question about property tax

I have a somewhat naive question about property tax. I’m too young to be buying property any time soon but did some reading about real estate. My understanding is that if property tax is 1%, and you by a $1M house, then you should expect to pay about $10k/year in tax correct? What is stopping a home buyer from negotiating a home seller to purchase the property for just $100k (on paper) while transferring $900k to the seller via a separate transaction. The seller gets his end of the deal, while the buyer reduces his tax rate down to just $1k/year. Is there some legal rule that I am unaware of? What is the cost to the seller (obviously you’d have to trust the buyer I guess)?

submitted by /u/luminix
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I have a somewhat naive question about property tax. I’m too young to be buying property any time soon but did some reading about real estate. My understanding is that if property tax is 1%, and you by a $1M house, then you should expect to pay about $10k/year in tax correct? What is stopping a home buyer from negotiating a home seller to purchase the property for just $100k (on paper) while transferring $900k to the seller via a separate transaction. The seller gets his end of the deal, while the buyer reduces his tax rate down to just $1k/year. Is there some legal rule that I am unaware of? What is the cost to the seller (obviously you’d have to trust the buyer I guess)? submitted by /u/luminix [link] [comments]

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