You find a house you like. You check the listing and the taxes are $1,500 a year. You run the numbers and the payment works.

Then the first tax bill shows up.

This happens all the time. On the Randal Jenkins Real Estate Hour a while back, Eric and I went through a list of real estate tips, and this one deserves its own post: the taxes on the listing are the seller’s taxes, not yours. When you buy, the property gets valued again, and your bill is based on the new number.

Why the number changes

The tax bill you see on a listing comes from the county’s last look at the property, usually years of value built up under the current owner. When you buy, the property appraiser can revalue it, and your purchase price is a big part of that.

Florida makes the gap bigger. If the seller has a homestead exemption, the Save Our Homes cap has kept their assessed value from rising more than 3% a year, or the inflation rate if that’s lower. If they’ve owned the home a long time, their assessed value may be far below what the house is worth today.

That cap doesn’t come with the house. After a sale, the assessment resets to market value as of the next January 1. The seller’s low tax bill goes with the seller.

What it looks like in real life

I had a buyer looking at a house with taxes of about $4,500 a year. We both knew it would go up, and he wanted to know how much. Some county property appraiser websites let you run a what-if: put in a sale price and see roughly what the new taxes would be.

He was buying at $400,000, on a house the county had valued around $225,000. The estimate came back at about $8,500 a year.

He said, “I can’t afford that.” And he walked.

I’ve lost deals over this, and I’d rather lose a deal than have a buyer find out after closing. If you go stand in the tax office for an hour, you’ll hear it over and over: “I just bought this house. Now you’re telling me I have to pay this in taxes?”

Lenders often don’t bring it up either. Back in 2008 and 2009, when values were falling, this didn’t hurt much. Now, with higher values and county budgets to fill, the numbers can be hard to believe.

How to protect yourself before you sign

• Ignore the tax figure on the listing. Treat it as history.
• Use the property appraiser’s estimator, if your county has one, and run your actual offer price.
• Ask your lender to qualify you on the estimated new taxes, not the seller’s. Your escrow and your monthly payment will be based on the new bill.
• Budget for the first year. If your escrow was set up on the old taxes, you may see a shortage and a higher payment when the new bill arrives.
• If you’re selling a Florida homestead and buying another one, ask the property appraiser about portability. You may be able to carry some of your Save Our Homes savings to the new home.
• Apply for your own homestead exemption on time if the home will be your primary residence.

None of this means you shouldn’t buy. It means you should know your real monthly cost before you’re under contract, not after you’ve moved in.

The seller’s tax bill tells you what the seller paid. It doesn’t tell you what you’ll pay.

If you’re looking at a home and want help estimating the real cost, call or text me at 727-409-4663. No pressure. Straight answers.

Randal Jenkins
Broker-Owner, Florida Real Estate Partners
Loan Officer, American Mortgage Services, NMLS #2053417
727-409-4663 (409-HOME)