Property Tax Shock
Buying a newly constructed home in Florida can sometimes lead to what we call "tax shock" because the property taxes are initially based on the value of the vacant lot, and then increase significantly when the home is built and assessed. Important factors to be aware of and consider:
When you buy a vacant lot and build a home, the initial property taxes you pay are based on the assessed value of the land only.
This assessed value is typically much lower than the value of the land plus the newly constructed home.
Once the house is built, the county property appraiser will reassess the property to include the value of the new structure.
This reassessment is typically done on January 1st of the year following completion of construction.
The reassessment will significantly increase the property's assessed value, leading to a higher tax bill.
The sudden jump in property taxes after reassessment can be a surprise for new homeowners, especially if they weren't aware of this process.
This is often referred to as a "tax shock" because the tax bill can be much higher than initially anticipated when purchasing the vacant land or starting construction.
It's really important to look into your county's homestead exemption status in Florida. It can significantly lower the amount of property taxes you pay. Qualifying for homestead exemption can also be a prerequisite for other property tax exemptions that you may qualify for.
