New owner's property tax liability much higher than current owners.

True... some of the schemes like in California and Florida to grant residents property tax relief can sometimes end up as golden handcuffs tying the owners to their long-term residences.

The approach Vermont takes to make property tax relief an annual thing based on income makes more sense to me and doesn't end up handcuffing people to their properties.
 
True... some of the schemes like in California and Florida to grant residents property tax relief can sometimes end up as golden handcuffs tying the owners to their long-term residences.
Florida homestead exemption is portable since 2008.
 
The discount in Florida is 4% for paying in November.
Gill



Isn’t that determined by each county? I’ve owned properties in three different Florida counties and something is always different between them.
 
Didn't know that... good to know... I stand corrected.
No, the homestead exemption is not portable in Florida and must be applied for on any new purchase. What is portable is the cap on tax increases which may be carried from one homesteaded property to another.
Gill
 
Keep in mind that states that have low or no income tax, or that (like PA) subsidize large groups of people (e.g. no income tax on SS or military pensions), have to get money from somewhere. Property taxes are an attractive target, because they are progressive. The more money people have, the more expensive a home they usually buy, and they can afford higher taxes on it.

Yeah, Property taxes are progressive because as they go up, people who cannot afford them sell their home and rent. :facepalm:

Then the demand for subsidized housing goes up, so property taxes are raised to pay for it, and the cycle continues.

Coming from IL, with one of the highest State taxes and Property taxes (and State debt) in USA. :facepalm:
 
No, the homestead exemption is not portable in Florida and must be applied for on any new purchase. What is portable is the cap on tax increases which may be carried from one homesteaded property to another.
Gill

So that's interesting. The seller in the OP's case gets a $365,249 Save Our Homes reduction from just value of $596,688. So if they sell and buy another property with a just value of $400,000 how is the Save Our Homes benefit ported? Is it pro-rated so their adjusted SOH benefit would be $244,851?... or some other number?

Curious as to how it works.
 
Yes, my understanding is that if you bought it and made it your homestead that your property tax would be based on the Just (Market) Value of $596,688 less the $50,000 homestead exemption.

I see the mil rate as 16.3786 on the TRIM notice... not 18.3786. You may also still qualify for the $34,284 agricultural exemption so there may be some potential savings there on county and other tax but not school tax.

Assuming that you would still qualify for the agricultural exemption and with the change in the mil rate I'm getting more around $8,600 a year rather than $10k... that's the $2,593 that the current owner pays plus the $365,249 Save Our Homes assessment reduction that would go away times the 16.3786 tax rate. YMMV. If you get serious about the property you could talk with the county as to what the taxes would be if you bought it and made it your homestead.

BTW, I had to truncate the address to 1620 N SR 53 to find it.

Keep in mind that they do offer significant discounts for early payment... my county offers a 4% discount if you pay by Dec 8, 2020 vs Mar 31, 2021... if Madison county offers similar terms that would drop it to about $8,250/year.


Thanks for clarifying and going into detail. :) I had to use the map on the assessors web page to locate the property as it didn't go directly with the address as you found. I'm not sure where I got 18.3786 as I also saw 16.3786 on the tax estimator page. Madison Co property tax page is very useful. This isn't the right property for us, way to large, too far from a beach and more than what we would like to pay, but love the land and privacy when compared to a subdivision or in-town. This look into estimating tax on a property purchase for us helps in our continued search.

Thanks
 
The home we bought a year ago is 3940 square feet, and we're having to pay our first property taxes before the EOY.

To think I'm complaining about $1347 in Alabama property taxes. Because my wife is disabled, next year and beyond the taxes will be $0000.

Let me just keep my mouth shut.

You can see why so many buyers expected to buy in Florida are buying in Gulf Shores, Orange Beach and the Alabama Gulf Coast. And defined pensions and Social Security are not taxed either--no state income taxes until RMD's kick in @ 72 years of ate.
 
True... some of the schemes like in California and Florida to grant residents property tax relief can sometimes end up as golden handcuffs tying the owners to their long-term residences.

The approach Vermont takes to make property tax relief an annual thing based on income makes more sense to me and doesn't end up handcuffing people to their properties.

Not true. In California under Proposition 13:

Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county.
 
You are correct. I looked at my latest statement and the discount is 4% if payed by the 30th of November.

Yep just paid it with the 4% discount. Hopefully the 3% property tax limit yearly stays in place in FLA.
 
Not true. In California under Proposition 13:

Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county.

Actually it's not even that restrictive. You described Prop 60, but Prop 90 allowed the movement of basis between counties that signed on to it, which included the most populous ones.

And now that Prop 19 passed earlier this month, owners over 55 will be able to move their basis anywhere in the state, and can even purchase a more expensive home if they wish to. I think Props 60 & 90 are essentially repealed as a result of Prop 19's passage, but IANAL and there may be some provisions of the earlier laws that will stick around.
 
True... some of the schemes like in California and Florida to grant residents property tax relief can sometimes end up as golden handcuffs tying the owners to their long-term residences.

The approach Vermont takes to make property tax relief an annual thing based on income makes more sense to me and doesn't end up handcuffing people to their properties.

Not true. In California under Proposition 13:

Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county.

Actually it's not even that restrictive. You described Prop 60, but Prop 90 allowed the movement of basis between counties that signed on to it, which included the most populous ones.

And now that Prop 19 passed earlier this month, owners over 55 will be able to move their basis anywhere in the state, and can even purchase a more expensive home if they wish to. I think Props 60 & 90 are essentially repealed as a result of Prop 19's passage, but IANAL and there may be some provisions of the earlier laws that will stick around.

I'm not sure whether to be happy that taxpayers are not handcuffed to their properties as I originally thought they were or sad for all the other property tax owners that end up paying more to make up for those who get "protected".... the resulting inequities seem unjustifiable... like in the OP where a new owner will pay ~$8,600 vs the current owner's $2,600... seems like a Robinhood game.

I'm not sure which is worse... having some taxpayers pay many multiples of what long-term residents pay under these schemes or having people get squeezed by property tax increases to the point where they can no longer afford to stay in their home and end up having to sell the "homestead". Perhaps there should be a cap on the amount of benefit that one can receive from these programs.
 
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Looked at a couple of properties in Florida on Zillow/Realtor. The seller's property tax liability was around $2400-$2700 a yr (I looked on the assessors page to verify) which I could easily afford with my modest retirement cash flow. Calculating what I would have to pay if I bought these properties came out to around $12K-13K a year, too high for my retirement cash flow. I'd expect to pay more than the current owner, but 4x as much?

I'm not familiar with Florida property taxes, but here in Washington state you can apply for a senior reduction if your income is below a certain level (once you turn 62). As I understand it, they freeze your property taxes at the current level (still not sure what happens if property values go lower), and you are exempt from "excess levies". In our case, that should knock about $2000 off our current $5000 property tax bill (1456 sq/ft house on 1.92 acres).

Until a couple years ago there was a fixed income level (40K if I remember correctly), but now it's a percentage of poverty level. Last I checked the cutoff was well over 50K, so we should qualify by the time I turn 62.

Depending on how much property values increase from the time my taxes are "frozen" and the time the property is sold when we die, it could end up being a big jump in property taxes for the new buyer.
 
If the owner claims homestead, the assessment is capped at 3% or CPI, whichever is less. Up on sale, the property assessment will be based off FMV, and if the new owner claims homestead, future increases will be capped (there is also portability if an owner sells and buys within two years to transfer the accumulated reduction). The save-our-homes cap definitely makes me more comfortable with my budget as I approach FIRE.
This is the answer.
 
From a public policy and economic equity perspective it is hard for me to justify that forcing non-resident and newer resident homeowners to pay more and allowing long-term resident homeowners to pay less... and ofter far less... is a good idea.

Don't get me wrong, I'm not going to voluntarily pay more, but I just don't see it as a good idea from a public policy perspective.

Why can't we all just pay our own way/fair share?
 
From a public policy and economic equity perspective it is hard for me to justify that forcing non-resident and newer resident homeowners to pay more and allowing long-term resident homeowners to pay less... and often far less... is a good idea.

Don't get me wrong, I'm not going to voluntarily pay more, but I just don't see it as a good idea from a public policy perspective.

Why can't we all just pay our own way/fair share?


I totally agree with this and pb4uski's post in the same vein.

When my first husband and I bought in NJ in 1984, property taxes as reported by the seller were sort of manageable (NJ is exorbitant to start with). After we bought it was re-assessed to the current value and the taxes went up substantially from what the sellers had been paying.

I'm in MO now and values are re-assessed every 2 years. They had to dial back the last assessment because people were getting 40% increases and they were overwhelmed with appeals (including mine). It got capped at "only" 25%.

Still, that seems a lot more fair. People shouldn't have to make the decision to stay in a house that's too big for them or otherwise doesn't fit their needs just to avoid a giant property tax increase. I'd rather see assessments kept up-to-date and affordability issues addressed based on income.
 
I had it happen when I bought my home in 2018. The property tax estimates on real estate websites put it at around $4700-4800 per year. So, imagine my shock when I bought it, and initially the property taxes were only around $3300 per year!

When the new tax bill came out for September 2019, it was back up to around $4700-4800 per year. I called to find out what happened. Turns out, that since I had bought the house in September of 2018, they accidentally gave me the previous owner's Homestead tax credit, which over time slows the rate that your taxes go up if the property is your primary residence. But, when a new owner buys the place, the credit goes away, and the taxes reset to the higher level.

It really wasn't that much of a shock to me, as the $3300 seemed too good to be true. But, I could see more extreme examples being a shock. Back in 2017, I had looked at a house, and the real estate listing said its taxes were only about a few hundred bucks per year! This was a $500K+ house. I found out that the person selling was a disabled veteran, or some similar category, where they got a huge break on their property taxes, and online, the real estate listing was showing that number, rather than what the taxes would be without the discount.

Just out of curiosity, I looked the house up online. Apparently it wasn't such a hot item, as it didn't sell until April of 2020, almost three years after I looked at it. And it only sold for $450K, whereas it was something like $533K or so when I saw it back in 2017.

The owner's tax bill was only $383, for years, but then for some reason for 2020 (due Sept 2019) jumped to $2291. And, the latest bill, for 2021, is up to $5547.

I guess I dodged a bullet when it came to that house. I remember it fairly well. It had a big master suite on the first floor, which is something I was looking for. And it had 3 more bedrooms upstairs, a 3-car garage, and was on 2.5 acres. But, it also had no basement, and looked like it was built on wetlands. Most of the property was wooded, and had that look to it like it would flood during a heavy rain. The area around the house and driveway was raised up, but it just seemed like an area that would stay damp. And, if I needed more area, such as extra driveway, more garage space, etc, it would probably be next to impossible to get permitting, because of the low-lying area.
 
The whole thread illustrates the value of using a "good" real estate agent. A good one could guide you on the likely taxes for any home you consider.
 
In Tx at least property taxes are frozen at 65 but if you look up the property on the appraisal districts web site (by county) it will tell you the taxes without the freeze or exemptions. I suspect that many tax authorities do the same. So another step, is to ignore the taxes as posted on the estimate and check the tax authorities web site.
 
Why can't we all just pay our own way/fair share?

Because the definition of "fair share" differs widely.

Why should one persons RE taxes go up just because some rich guy overpaid for the house across the street? Hardly seems fair to me.

Why should people without kids have to pay for school taxes for other people's life choices? Doesn't seem fair to me.

...and the list goes on and on and on....
 
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