Why your property tax bill won't match the seller's

Buyers from other states often look at the tax line on a listing and plug it into their budget. In Florida that number can be far too low, because it reflects the seller’s history with the property, not yours.

Assessed value is capped while you own, then resets when you sell

Florida limits how fast a property’s assessed value can rise each year:

• A homesteaded primary residence is covered by the Save Our Homes cap. Its assessed value can rise by no more than 3% a year, or the rate of inflation if that is lower.
• Everything else, including rentals and second homes, is capped at 10% a year. That cap does not apply to the school portion of the bill.

Someone who has owned a home for fifteen years may be taxed on a value far below what the house would sell for. When the property changes hands, the cap comes off. On the following January 1, the county property appraiser reassesses it at market value, and your taxes are calculated from there.

What that means for a buyer

• If you will live there, apply for the homestead exemption with the county property appraiser by March 1 of the year after you buy. It takes up to roughly $50,000 off the taxable value and starts your own Save Our Homes cap. If you are moving from another Florida homestead, ask about portability, which can carry part of your old cap benefit to the new home.
• If it is a rental or a second home, there is no homestead exemption. Budget from the purchase price and the local millage rate, then assume the assessment can climb up to 10% a year.

How to get a realistic number

Every county property appraiser on the Gulf Coast publishes a tax estimator. Enter the price you expect to pay and whether you will homestead the property. Use that figure, not the seller’s bill, when you compare homes.

Two other things to know:

1. Florida property taxes are paid in arrears. Bills go out around November 1, with a discount for paying early: 4% in November, shrinking by a point each month through February.
2. In newer communities, the bill may include a community development district (CDD) assessment on top of the tax itself. Ask for the breakdown.

We are glad to run the estimate with you for any address you are considering. For advice on your own tax situation, talk to a CPA.

This article is general information, not legal, tax, lending, insurance, or investment advice, and it may not reflect changes made after the date above. Check the specifics of any property with the right professional before you rely on them.

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