A home is a big investment, so it’s important to understand all the expenses that come after buying a home. One expense homeowners forget about is property taxes.
Property taxes can be a significant annual expense that can affect you for years after your purchase. So it’s important to know what your property taxes will be and how it works.
How are property taxes calculated?
Property taxes are calculated by multiplying the property tax rate or millage rate by the current market value. Then it’s recalculated for 1 to 5 years by a local assessor. Market values are based on both the land and the structures on it. But this can vary by location.
Florida calculates property taxes using millage rates – which is 1/10 of a percent. This means that every $1,000 in home value equals $1 in taxes.
What are the property taxes in Florida?
The average property tax rate in Florida is 0.80%. This is slightly lower than the U.S. average of 0.99%.
On average, a homeowner in Florida pays $2,338 – around $400 less than the national average. Keep in mind the amounts will vary depending on the county.
Will my property taxes be the same as the seller’s property taxes?
Your property taxes will probably not be the same as the seller’s current taxes.
Here’s why: When there’s a change of ownership (or property improvements) a reassessment is triggered. Usually, this results in higher taxes for the new owner.
But you can estimate your future property taxes in 2 ways:
How are property taxes paid?
How you pay property taxes will depend on your mortgage and your lender’s requirements.
If you don’t have a mortgage, you’ll pay directly to your local government.
If you have a mortgage, typically an escrow account is set up at closing and managed by your mortgage company. Whenever you make a mortgage payment, a portion of that payment is deposited into the escrow account – usually along with funds for your home insurance and flood insurance premiums.
An escrow account to pay property taxes is required for FHA and USDA loans, but some conventional loans may require this as well.
When are property taxes paid?
The due date for property taxes varies by local government. Check your county’s website for more information.
How can I make my property taxes more affordable?
There are 2 ways you can make your property taxes more affordable:
File for exemptions
A property tax exemption allows you to limit the property value you pay taxes on and helps reduce the bill amount.
But exemptions are not automatic. You must apply for them by specific deadlines. The good news is you can apply and receive more than one exemption if you qualify.
The most common exemption is the Florida Homestead Exemption. Read Florida Homestead 101 to learn more.
You can also apply for several other exemptions:
An installment plan won’t lower your overall tax bill, but it can lessen the impact on your budget by splitting the payments over a certain period.
The state of Florida requires the estimated taxes due to be $100 or more to qualify for an installment plan. But always check with your local government to see if they offer installment plans and the deadline to apply.
Still not sure about property taxes? Or have further questions?
Let us know, and we’ll make sure you get to the right resources and people.
Your Team at Liberty Title Company of America