Many prospective buyers will get confused when trying to figure out the real estate taxes they will pay when buying their new home. When looking at the taxes of particular homes in the mls some will scratch their heads in the difference of taxes on homes that are similar and in the same neighborhood.
There are several factors that cause this. In Florida we have a homestead exemption which applies to homeowners who reside in their home as their primary residence. Homestead homes receive a $25,000 exemption on the assessed value of the home.
For instance if your homes is assessed at a value of $200,000, then you are going to be taxed on $175,000. The other part of the homestead is the save our homes cap which caps the amount the real estate taxes can be increased per year, which is currently 3% per year.
Homes that are not homestead are going to be taxed on the current market value of the home which can increase every year.
This is why you will see similar homes with different real estate taxes. Do not go by what the current owners are paying for taxes, the taxes are going to be reassed on the home you buy anyway. I will show you the easiest way to calculate and estimate what your taxes should be.
The best way to figure out what you are going to pay in taxes is to figure the home to be assessed at what you purchased it for. Let’s use an example. Let’s say you buy a home for $225,000 and you qualify for homestead. You are going to multiply $200,000 after your $25,000 reduction times the millage rate. In Hillsborough County the millage rate is roughly 21 which means for every $100,000 of value you will be taxed $2100 so in this case your taxes would be roughly $4200 per year. You can also use the Hillsborough county online tax estimator.
Now this is just for the valorem tax there are other non ad valorem taxes such as Water and Wastewater, SW Disposal. These you can estimate by going to the Hillsborough county tax records of the property you are buying and see what the previous owners paid for the past year.
Now your home may not necessarily be assessed at what you paid for it. It most cases it may be lower but go by the purchase price for worse case scenario.
This is prior to the recent amendment one bill that was passed this year which doubles the exemption to $50,000 and has portability of current homeowners who can transfer the save our homes exemption to a new home they purchase. I will have more information on the new exemption coming soon.