taxes on new construction?

[teton]

Does anyone know how property taxes work with new construction? I know they are lower at the beginning, but how soon do they jump up to their normal level? When you are applying for a mortgage, how do they calculate the taxes in order to determine if you can afford your monthly payment? Thanks.

[BrianB_The_Loan_Professor]

The taxes for approval purposes are based on what they will be once adjusted.

The taxes charged at close are based on the land tax value.

Once recorded they are readjusted and you get a nice bill for the difference.

That supplemental tax bill needs to be planned for

good luck

Brian

[Junejer]

Typically, you will be able to get through that first tax year, with the lower taxes based on the land alone. At least, that's how it works in my neck of the woods. Have three new construction properties (two are income properties). The latest one has a tax bill of $536, but the bill will go over $4,000 for the next tax year.

[teton]

Want to make sure I am understanding this. Using your example of $536 in taxes for the first year based on the land value: Once taxes adjust to $4k, do I have to pay the difference for the first year (4000 - 536) in addition to the $4k for the second year? Thanks.

[ShanetheMortgageMan]

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@teton wrote:
Want to make sure I am understanding this. Using your example of $536 in taxes for the first year based on the land value: Once taxes adjust to $4k, do I have to pay the difference for the first year (4000 - 536) in addition to the $4k for the second year? Thanks.

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Most likely no - but you need to contact your county's tax treasurer to get concrete answers since this question could get a different answer depending on where you are buying.

Here in California, the property taxes at closing are the current property taxes the previous owner was paying.  Then within a few months, you get a supplemental tax bill which is the difference between what the previous owner was paying, and what the property taxes should've been assessed at once you purchased the home.

[Junejer]

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teton wrote:
Want to make sure I am understanding this. Using your example of $536 in taxes for the first year based on the land value: Once taxes adjust to $4k, do I have to pay the difference for the first year (4000 - 536) in addition to the $4k for the second year? Thanks.

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In my case, no. The property was a vacant lot, where the developer is developing a formerly decaying neighborhood with new construction SF homes (around 150,000-225,000).