The Importance of Watching Out for Your Tax Bill
When you purchase a new home, it’s essential to be aware that your property taxes will likely be reassessed by the county. This reassessment is based primarily on the sale that just took place, which means your taxes may increase if you purchased the home in an appreciating market.
Real World Numbers: A Case Study
We’ll examine a real-world scenario in which a homeowner saw a significant increase in their tax bill due to reassessment. In this case, the homeowner’s tax bill increased by around $3,700, or $314 per month, after the property value was reassessed.
How Homestead Exemptions Affect Future Taxes
The prior homeowner in this case had a homestead exemption, which caps annual tax increases at 3%. This means that the new homeowner experienced a considerable tax hike due to the reassessment of the property’s taxable value.
Importance of Buyers and Realtors to Be Aware of Potential Tax Increases
Both buyers and real estate agents should be vigilant when it comes to potential tax increases. Mortgage companies may not always be upfront about these increases, so it’s essential to work with a mortgage consultant who has your best interests in mind.
How To Estimate Your Future Tax Bill
While it’s impossible to know your exact future tax bill, you can use the county’s tax estimator tool or compare similar properties in the area to get a ballpark figure. This can help you prepare for potential tax increases.
Be Aware of Length of Prior Ownership and Homestead Status
Understanding the length of prior ownership and the homestead status of the previous owner can help you anticipate potential tax bill increases. For example, if the prior owner had the property for a long time and had a homestead exemption, you can expect a significant tax increase when the property is reassessed.
New Construction vs. Resales
When purchasing new construction, lenders will generally account for future tax increases. However, with resales, lenders often only consider the current tax bill, so it’s crucial to be aware of potential increases.
Message to Realtors
Realtors should discuss potential tax increases with their clients, particularly if they are payment-sensitive. This can help prevent financial struggles down the line.
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In conclusion, being aware of property tax reassessments and potential increases is essential for both buyers and real estate agents. By understanding these factors and working with a knowledgeable mortgage consultant, you can avoid surprises in your mortgage payments and set yourself up for long-term success.
