Property taxes are a part of the cost of owning a home. When you buy a home you not only have the cost of the monthly mortgage payment. You also need to consider property taxes, homeowners insurance, any HOA dues, maintenance, and utilities.
What amount will I owe?
Many people wrongly assume property taxes are a fixed cost. They believe whatever amount is billed when you first buy the house, is what the amount will be for the life of owning the home. However, property taxes can change quickly after buying a home. Most counties assess property value annually, and adjust the amount due annually.
Unless you live in an area that strictly limits property taxes, like in California, where they passed Proposition 13 back in 1978. Prop 13 says that property taxes are a fixed percentage upon the transfer of property, and that the annual tax bill can only go up 2% a year from there. Prop 13 allows for a small inflation adjustment, and helps in budgeting for your mortgage.
The sale of a home will trigger a tax assessment?
Different counties will reassess property at different intervals, but most will reassess upon transfer of ownership. Major home improvements can trigger a reassessment. Or there may be planned reassessments at certain intervals, like once a year or once every 3 years.
The amount due can change?
You also need to realize that property taxes can change quite a bit from what you may see online or from what they are when you initially purchase the home. A home may be taxed at a senior citizen rate when you buy it. But that will go away if you are not a senior citizen. When buying a home that was a rental property a home may be taxed at an investor rate. And if you are going to live in the home as your primary residence that means your tax rate may go down.
Sometimes a home may be under assessed when you buy it. You may get reassessed after you buy it and brought to a current market value. This means you may see the property taxes go up quite a bit from what you thought they were initially. Or a home may be over assessed when you purchase it.
The important point is to be aware that your property taxes due may change from when you initially purchase it. Further, it may change over the entire time you own the property.
Property tax rates
Be aware of how property taxes are calculated when you buy a property for budget purposes. Look up information on your property taxes before you buy. The below resources will help.