Since market values have gone up 9.5% on our taxes for homes in the past year, you need to know how to budget for your tax amount.
Property taxes are an important part of our budgets when we’re buying a new property or looking at how a property cash flows. This past year, our market values went up 9.5% on our proposed taxes for our homes. What does that mean?
If your property was homesteaded, it likely means absolutely nothing. For example, for my primary home, the market value actually went up $125,000, and yet, my assessed value only went up $2,000. If you own an investment property or a commercial property, however, you don’t have that benefit. You may be a little shocked this year when you get your tax bill, but you can make that payment in November.
The other person who might be a little shocked this year is the one who purchased a home last year, especially if that home had the “save the home” benefit. You may have budgeted for a lower tax amount or had a lower tax amount in your escrow account, and now you’re having to make up for last year, plus your lender will adjust your escrow account for next year.
We’re getting a lot of calls from buyers and sellers who are confused about taxes, especially those who’ve just made their purchase. If this includes you, here’s my advice:
If you already own a home and it’s not homesteaded, and it’s now a financial challenge for you, give us a call and let’s look through your options. Maybe that property that did create cash flow is no longer the right option.
If you just purchased a new home, make sure you file for homestead exemption. That will save you thousands of dollars in the future, plus provide other benefits.
If you’re in the home buying process, it’s not important what the taxes are today; focus on what they’ll be in the long term. What you need to do is look at the current owner’s market value versus the assessed value. If there is a differential, your taxes will likely go up in the future. That’s OK as long as you budget accordingly.
This is important to remember if you know your escrow account might be a little short. You can set that money aside and you won’t be as surprised next year when you receive a higher tax bill.
So, go ahead and file for the homestead if you can. If you sold a home in Florida and purchased another home in Florida this year, you have another benefit called “portability.” That means you take some of your benefits of that previous home—the tax savings—and bring it to your new home.
If you’re interested in learning more about property taxes and homestead exemption in Florida, click here. If you have any more questions about property taxes, give us a call or send us an email. We look forward to hearing from you!