Know Your Future Real Estate Taxes Before You Buy!
Every year, your property is re-assessed on January 1st, and the dollar amount will be different than the previous years assessed value. That is a fact.
When you buy a home, you inherit the previous owner’s taxes, until you get re-assessed on January 1st of the next year. On November 1st of the next year, your new tax amount is due. So if you buy a home in 2012, your real estate taxes will not change until November 1st, 2013. If you get an FHA or VA loan, or if you escrow for taxes and insurance, December of the following year is when your monthly payment changes.
How Much Will The Real Estate Taxes Be? 3 EZ Steps to Estimate Your Future Real Estate Taxes
Click on “Homebuyer’s Tax Estimator” on the right side of the window below
Enter the desired purchase price. Click the homestead box (if applicable) and any other applicable deduction.
Scroll down and you will see your estimated future taxes.
For a more accurate calculation, simply do purchase price times 85% minus 50,000 (only if you plan to file for homestead exemption) divided by 1,000, times the mileage rate for the city you want to live in.
That number will be your future ESTIMATED real estate taxes. As long as you file for homestead, your Assessed Value will not increase more than 3% per year.
Taxes for current owners with homestead exemption will have a cap increase of 3%. Investment property will cap out at 10%. And new homeowners will be re-assessed according to the new purchase price (except for foreclosures and short sales---re-assessed at market value)
How Much Will My Monthly Payment Change? Only for VA or FHA
A portion of your mortgage monthly payment goes towards the taxes that are going to be paid in November. So when the mortgage company goes to pay the taxes, they will be either short, on target, or over with the amount of money they have collected from you.
The shortage or overage will depend on the difference between the new and old real estate taxes. If you are over, they will most likely send you a check for the difference, and your monthly payment will decrease by the difference divided by 12. If you are short, you will have to send them a check to cover the difference, and your monthly payment will increase based on the shortage divided by 12.
Example: New Taxes are $4,800.00
a) Previous Owner taxes were $7,500.00. They will most likely send you a check for $2,700.00, and your monthly payment will decrease by $225.00. You will have to ask your lender to send you the check.
b) Previous Owner taxes were $2,500.00. You must send a check for $2,300.00 and your monthly payment will increase by $192.00. Your lender will ask you for the check.
Do you want to estimate your future taxes? Click below "Homebuyer's Tax Estimator"