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Thanks for this great explanation Anthony. I bought in 2009 and saw my taxes drop the first couple of years and then started increasing at a low rate compared to the increase in property value. This explains it.
Hey Anthony! Great content and perfect timing as I was recently trying to figure how takes are calculated. I have two questions if you can clarify please - If you buy a new construction home, how are the taxes calculated for the first year since there wasn't a previous home on the bare land to calculate from? For example, if the new constructed home costs $350,000 to purchase is it calculated from that amount in the first year? Second question - If you buy a resale home, do the taxes continue forward from the previous owner to the new owner, or does it start over and get reassessed from the new value (purchase price)? Thank you!
Hey! Thanks for watching and absolutely fantastic questions. For the new construction, they will still use the replacement cost calculation and the market value of the land, but because it was just built it is going to be very close to what you pay for the house. There may be some small adjustments but it is going to be very close... and remember this "value" number still gets multiplied by the assessment factor (generally 35%). For resale, yes the tax carries forward from the previous owner so think of it as a put in service date and it just keeps moving forward from there. The only time there would be a slight recalculation would be if it went from an owner occupied, to a non-owner occupied, back to an owner occupied. In that scenario the total taxes due (not paid) would be the same throughout, but for the period of time that the investor/non-owner occupier owned the property the taxes paid would revert to the default of up to 8% per year increase until it become owner-occupied. So the taxes due (not taxes payable) would remain the same regardless of who owns it, the taxes payable may increase, and when you take over, now as an owner-occupied property, you inherit the last taxes payable, but moving forward they could only increase by 3% per year. Hope that makes sense.
@@thecandellagroup : Got it. One last question to make sure it’s all clear. So a new constructed home could cost a buyer more in taxes than a similar home in the same tax bracket on the resale side? Reason being the new constructed home is assessed at or close to the purchase price, while the resale home was assessed years ago with a 3% owner occupied tax increase cap YoY? And again the property tax rate on resale is transferred to the new owner? Thank you!
@@beninformato9040 as a general rule yes on the new construction. And yes on the transfer to the new owner. I would just throw in that there could be some crazy weird situation that would break the general rule but in 99%+ of the situations this would apply. I don’t know what that situation would be exactly but for the overwhelming majority of circumstances this would hold correct. Also if there is a specific property or situation you want to know more about let me know and I’ll help assess it with you. 702-529-1986 call/text
Am I missing something or is this a YUGE!! disincentive to buying a home new-built? Strongly contemplating a move there. By my math at $700,000 taxes would be $6100ish
