Property Tax Estimate for a New Buyer in Florida: Why the Seller's Bill Is Wrong
A property tax estimate new buyer Florida budgets should use the purchase price, not the seller's bill. The cap resets at sale and the first full year can be double what the listing shows.
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A property tax estimate new buyer Florida budgets should start from the purchase price, not the seller's current bill.
The assessment cap resets at sale, and the first full year can run far above what the listing showed. Our property tax calculator runs the estimate.
Why the seller's bill is wrong
A long-time homestead owner's assessed value is capped at 3 percent growth a year.
See our guide to the Florida homestead exemption.
After years of appreciation, the assessed value sits far below market.
At sale, the assessment resets to market the following January.
Your bill is based on the reset, not the cap.
The estimate
Purchase price times roughly 85 to 95 percent for assessed value, minus exemptions, times the millage rate.
Add non-ad valorem assessments.
The county property appraiser's site has an estimator that does it.
The Florida Department of Revenue links to each county.
Use it before you offer.
Millage rates
The sum of county, city, school, water management and special district rates.
Expressed per thousand dollars of taxable value.
Rates differ by city within a county.
Unincorporated areas often differ from cities.
The TRIM notice lists each.
Exemptions
Homestead removes up to $50,000 of value from most levies.
Additional exemptions for seniors, veterans, disability and first responders.
See our guide to the VA disability property tax exemption in Florida.
File by March 1 of the year after you move in.
Year one is often without exemptions.
Year one versus year two
Year one: you may pay the seller's prorated bill through closing and the reset bill in November.
Year two: the full reset with your exemptions applied.
See our guide to closing costs in Florida for the proration.
The escrow account is set from the old bill and catches up in year two.
Expect a payment increase.
Escrow shortage
The lender sets escrow from the current bill.
See our guide to escrow accounts in Florida.
The reset bill produces a shortage in the first analysis.
The payment rises to cover it plus the new monthly amount.
Ask the lender to escrow on the estimated reset bill from the start.
Non-ad valorem assessments
CDD fees, solid waste, fire and stormwater assessments appear on the same bill.
See our guide to CDD fees in Florida.
They are not capped and not reduced by homestead.
The tax collector's site lists them by parcel.
Add them to the estimate.
Portability
A buyer moving from another Florida homestead can carry cap savings to the new home.
Up to a set amount of assessed value difference transfers.
File the portability application with the homestead application.
It can cut the reset bill significantly.
Out-of-state buyers have nothing to port.
Non-homestead buyers
Second homes and rentals have no homestead and a 10 percent cap.
See our guide to the non-homestead cap in Florida.
The reset applies the same way.
School taxes are uncapped.
The estimate is higher.
New construction
The builder's bill covered land only.
See our guide to new construction mortgages in Florida.
The first full assessment captures the completed home.
The jump from land to improved value is the largest reset of all.
Estimate from the contract price.
Appealing the assessment
If the reset value exceeds what you paid, appeal.
See our guide to property tax appeals in Florida.
The purchase price is strong evidence.
The deadline follows the August TRIM notice.
A successful year-one appeal lowers every later year.
How lenders qualify you
Some lenders qualify on the seller's bill; some estimate the reset.
See our guide to maximum DTI in Florida.
The difference can change the approval.
Ask which figure was used.
Qualifying on the low bill and paying the high one is a budget trap.
Comparing two homes
A lower-priced home in a high-millage city can cost more in tax than a pricier home in a low-millage area.
Run both estimates.
See our guide to moving to Florida and getting a mortgage.
Add CDD fees.
Compare the full payment.
Tax bills and timing
Bills mail in November with discounts for early payment.
Escrowed loans pay in November to capture the discount.
Delinquent after April 1.
Tax certificates are sold on unpaid bills.
See our guide to buying at auction in Florida for where that leads.
Save Our Homes going forward
Once you file homestead, your assessed value grows at most 3 percent a year.
Over a long hold, the cap becomes valuable.
The reset is the price of entry; the cap is the reward for staying.
The next buyer will face the same reset you did.
That is the Florida system.
Where to start
Run the county estimator with your purchase price and the exemptions you will qualify for.
Add the non-ad valorem lines from the tax collector's site.
Then get a pre-approval with that figure in the payment, not the seller's bill.