For those who have never owned a home, property taxes can seem like a distant afterthought. But when it comes time to purchase a home, business, or other property, knowing what the associated property taxes are can be a very big deal.

Even though most property taxes seem like very small amounts, often coming in below 1 percent, those small figures can add up to a lot of money over years. And property taxes are serious business. Failing to pay can eventually lead to the foreclosure and forced sale of a home. Here are some things that every prospective property owner should keep in mind about property taxes.

Owners never really own their properties

In the state of Illinois, property taxes can run as high as 4 percent annually, making that state one of the most punitive tax regimes in the nation. While this may not sound like a big deal, 4 percent of a million-dollar home represents a $40,000 check that must be written each year, come rain or shine. Failure to pay that $40,000 means that the city or county in which the home is located could eventually seize and sell it. And in states like Illinois, which are increasingly desperate to raise money, such moves become far more likely.

Aside from the huge amount of money that these property taxes represent, they put strong downward pressure on prices. All things being equal, homes in areas with property tax rates that are just 1 percent higher will tend to sell for significantly reduced prices. This is simply a reflection that the higher property taxes are, the less a property owner actually owns their property.

Property taxes can be a write off

But it’s not all bad news. For those living in areas with high property taxes, it is usually possible to write off all property taxes from income. This can significantly lower both federal and state tax bills, especially for individuals or businesses with multi-million-dollar properties.

Property taxes usually help to fund tangible services

Another positive aspect of property taxes is that they usually go to fund local schools, roads, and governments. These are tangible services that the taxpayer probably uses on a regular basis. However, in states like Illinois, property taxes may also go to paying sunken costs like public employee pensions, which provide no tangible benefit at all to the taxpayer.