Home Buyer Information
Greetings, prospective Florida homeowners.
I’m Kyle Sasser from Ashlar Home Team. Let’s delve into a truly riveting topic: PROPERTY TAXES!
While not as exhilarating as the beaches or theme parks, it’s critical that you understand how Property Taxes work in Florida.
Primarily: You MUST ignore the property tax field on Zillow.com, Realtor.com, Redfin, and even the MLS results that I send to you!
WATCH THE EPISODE!
Florida Property Taxes
Before we delve into the specifics, let’s address a common pitfall. You go to your favorite real estate website, find a house you like, and take a look at the property tax field to get some idea of what your property taxes will be.
However, this field ONLY reflects what the current homeowner is paying for their property taxes.
And with how Florida’s Homestead Exemption works, the property tax that you pay likely will be significantly higher than what the current owner is paying!
The homestead exemption is immensely beneficial for homeowners. I’m sure you’re looking forward to reaping it’s benefits!
But the issue with this field comes from when a homeowners owns a home for a while, especially when prices are moving significantly. The current owner’s property tax assessed value is capped by state law at 3% per year or Consumer Price Index, whichever is less.
However when you buy the home, the property will be reassessed based on your purchase price.
In the real world, it is not uncommon for you as the new homeowner to pay double, triple, and in rare cases I’ve even see it be 10 TIMES! what the previous owner was paying.
This is because their property taxes are effectively calculated off of increases from their original purchase price 3, 7 or 25 years ago, and that 3% cap really keeps things dramatically down.
Wouldn’t you rather know what your actual property tax liability is going to be?
What Will Your Property Taxes Be?
The only way to truly have a good estimate of what your property taxes will be is to use the Property Tax Estimators provided by the county’s Property Appraiser.
Visit your county’s site, locate the tax estimator tool, input the address, city, estimated sales price, and your homestead intentions. The result will be a more reliable estimate.
Now, you may wonder, “Can’t you offer a rule of thumb?” The truth is, property tax calculations in Florida are complicated, with 6-15 different line items all of which differ between city, county and sometimes even neighborhoods.
I do of course have a rough idea of what property taxes typically are for a given price range but it’s usually +/- $2500 which isn’t very helpful when budgeting.
The surefire method for takes about 20 seconds at the property appraiser’s websites.
Relevant Links - Access the Property Tax Calculators
Does Homestead Exemption Stop Reassessment?
Speaking of homestead exemption, it’s a powerful tool deserving of its own dedicated discussion. I will link to this video on an in depth discussion about it when it’s completed.
But here’s some basic keys to know in regards to determining what your property tax payments will be.
First off, because of the way Florida Property Tax works, the home you buy will have its value reassessed on January 1 of the next calendar year. So if you buy a home in June 2024, on January 1 2025 the property tax assessed value will adjust to reflect your purchase. Typically this will be slightly below your actual purchase price.
The Homestead Exemption does not stop this first reassessment after a purchase. It just prevents subsequent years from increasing your assessed value.
If you are considering a property transfers such as into a trusts, LLC, or other type of title change, be sure to check with an attorney. Such transfers can trigger a reassessment, so make sure you have planned for and understand your liabilities before executing a transfer by speaking with a legal expert.
So What's the Takeaway?
Ignore the property tax field on any public facing website! It has absolutely no bearing on what you will pay for property taxes.
Ready to get started?
If you have questions not answered here, or any concerns about the process of buying or selling your home, feel free to contact me via this contact for or schedule a phone call for a time that works for you.
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