‘I felt like I’d been baited and switched’: Florida homeowner sells her house after property tax bill soars 74%

[GulfCoastZilla]

This happens on new builds. If they are built the same year you buy, taxes are appraised at land value only, due to there being no house when the appraisal occurs. The following year you get hit with the land and house value since it now exists at the time they do the appraisal. The difference in taxes will be thousands of dollars. Just reads like this lady spent everything she had to buy the house, had no emergency fund or anything left over.
This is just the case of someone who skipped pretty much every safety net and still bought a property.

As far as the homestead exemption, it can only be filed the year after you purchase the property (if it is after the appraisal occured), and it won't take affect until the 2nd tax period.

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Yeah we bought in October and had people from the county knocking on every door in the sub division reminding people about the homestead and to file by whatever February date.

Even then I feel like our lender gave us an option at closing to pay more now (to cover that bump) or don't and get that unpleasant surprise this lady got.

We also watched ALOT of YouTube video's about Florida / new homes before moving from NY. Like hours and hours worth of videos

 

[Kiyamet]

She bought a home for several hundred thousand dollars but an extra $160/month tax increase was catastrophic?

Something doesn't really add up here. Based on the headline I thought she'd be paying hundreds more per month. I guess she purchased right at the edge of affordable or something like that.

Home insurance is a serious fucking issue in Florida though. I know people whose rates have more than doubled, especially down in the peninsula.

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If you saved for years to put money down and were on a strict budget for personal reasons, on TOP of inflation, then yeah... that can be a deal breaking surprise.

 

[qaopjlll]

Yeah there's definitely something missing from this story, as people have pointed out. A bank wouldn't have given her a loan to buy a house if she couldn't afford a $160/mth tax increase following reassessment

 

[PanzerKraken]

Gotta get homestead in FL, even then it's absurd.

But Desantis is busy fighting evil woke things like lab grown meat

Florida may have no income tax but it makes up for that with high property taxes. Same with Texas

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And highest insurance rates in the country

 

[demosthenes]

The downside of Florida's lack of income tax is sky high property taxes. Hillsborough charged me over $4k last year.

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Nys has income tax and my property taxes in a nice suburb outside of Buffalo were 8k for school and county.

 

[olubode]

Why is property taxed in the first place? Haven't your dollars spent buying the house already been taxed?

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How do the streets and schools get funded?

 

[StreetsAhead]

This happens on new builds. If they are built the same year you buy, taxes are appraised at land value only, due to there being no house when the appraisal occurs. The following year you get hit with the land and house value since it now exists at the time they do the appraisal. The difference in taxes will be thousands of dollars. Just reads like this lady spent everything she had to buy the house, had no emergency fund or anything left over.
This is just the case of someone who skipped pretty much every safety net and still bought a property.

As far as the homestead exemption, it can only be filed the year after you purchase the property (if it is after the appraisal occured), and it won't take affect until the 2nd tax period.

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That makes a lot of sense, but I can't find anything in the article that clarifies whether it was a new build. I wish it actually explained the reasoning behind the steep jump.

But yeah, if she couldn't afford an additional ~$2K a year then she was definitely house-poor already.

 

[BlackSalad]

This makes zero sense

The amt of money she is throwing away just from selling the house is more than the extra tax (not to mention closing and financing a new one!).

The housing situation in Florida sucks and all but I think this was some bad decision making?

 

[Relix]

People don't understand how taxes work. Our realtor and brokers told us about this. You lose exemption on your first year as a new owner so the value is appreciated based on the selling prices and other factors, of course it will jump. By the next year Homestead kicks in and raises are capped. We budgeted based on expected Year 2 taxes and we didn't have a problem. People just don't understand how the system works.

Also, no income tax state. Of course the property tax will be larger.

 

[Culex]

People don't understand how taxes work. Our realtor and brokers told us about this. You lose exemption on your first year as a new owner so the value is appreciated based on the selling prices and other factors, of course it will jump. By the next year Homestead kicks in and raises are capped. We budgeted based on expected Year 2 taxes and we didn't have a problem. People just don't understand how the system works.

Also, no income tax state. Of course the property tax will be larger.

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This.

Also, you should never look at the public tax data for the house you are purchasing and think that is what YOU are paying when you buy it. There could be baked in rebates/sweetheart deals for the current taxpayer.

 

[Kernel]

People have to let go of the "American Dream". It's gone and never coming back.

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"It's called the American Dream because you have to be asleep to believe it"

 

[Brando]

People don't understand how taxes work. Our realtor and brokers told us about this. You lose exemption on your first year as a new owner so the value is appreciated based on the selling prices and other factors, of course it will jump. By the next year Homestead kicks in and raises are capped. We budgeted based on expected Year 2 taxes and we didn't have a problem. People just don't understand how the system works.

Also, no income tax state. Of course the property tax will be larger.

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Yep this same exact thing happened to me. My monthly mortgage payment increased 25% after the first year because of the difference in the property taxes due to the value appreciation between the original home owners value and my new one. Ended up with a $7k escrow shortage that year.

 

[Eric_S]

Why is property taxed in the first place? Haven't your dollars spent buying the house already been taxed?

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Taxing things one time is basically impossible. And doesn't really let you analyze what most people use taxes for.

Proper taxes are very effective taxation. And, in the larger scheme of things, pretty well balanced. If you have a lot of money and the property to match, you can't really move that unless you move yourself. So it's a good way to tax the rich.

This being said, (and not knowing how Florida handles property taxes at all) I wouldn't mind there being a large inflation adjusted deductable for property. Like, you start paying taxes after 600k or the like. Ie for a 700k house, you pay taxes on 100k, and so on.

 

[MechaMarmaset]

That makes a lot of sense, but I can't find anything in the article that clarifies whether it was a new build. I wish it actually explained the reasoning behind the steep jump.

But yeah, if she couldn't afford an additional ~$2K a year then she was definitely house-poor already.

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It's very easy to find this info based on what they gave in the article. They gave her full name and county. That's enough to get the auditor records from any county's web site. Was built in 2022, sold in 2022, then she bought in 2023. Prior years you can see it had no building value only land value. Total market value jumped from 40K to 286K assessment. And she indeed does have the homestead exemption of ~50K.

 

[Manngc]

Yep this same exact thing happened to me. My monthly mortgage payment increased 25% after the first year because of the difference in the property taxes due to the value appreciation between the original home owners value and my new one. Ended up with a $7k escrow shortage that year.

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Exact same thing happened to us. I planned for the increase and knew that escrow was going to have a ridiculous shortfall. Like over 9K. Since the house we vastly over paid for more than doubled in value.

 

[StreetsAhead]

It's very easy to find this info based on what they gave in the article. They gave her full name and county. That's enough to get the auditor records from any county's web site. Was built in 2022, sold in 2022, then she bought in 2023. Prior years you can see it had no building value only land value. Total market value jumped from 40K to 286K assessment. And she indeed does have the homestead exemption of ~50K.

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Thanks!

 

[EMBee99]

Weirdly, after the first year in my current home, I got an escrow refund and my monthly went down a couple hundred bucks. I think it's because we filed for the homestead exemption which I don't think the previous owners did.

 

[Falchion]

Brutal for homeowners. Buying in Florida seems pretty scary given this and the home insurance rates.

 

[BringBackSonics]

Something is off with this story, what did they sink all their savings in to "alarm system, things like that". Sounds like they overspent upgrading the house straight out of the gate.

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Yeah, I wouldn't imagine having to sell your home because the property tax is an extra 1800 from
One year to the next. Feels like she had zero wiggle room due to using her savings on 'alarm systems and 'things like that'. There is definitely a misconception that you are good to go once you pay off your monthly housing bill. But homes are expensive to take care, and that's even when things are running smoothly. Things will break, or utilities will soar

 

[Rodney McKay]

This kinda happened to me and my partner when we moved to San Diego 6 years ago.

The first year our mortgage payments I think were around $1900 a month. Then when the first property tax payments came (which gets taken out of a portion of the equity built over the year), it was apparently higher than the mortgage company originally thought, so our monthly mortgage payment was raised to like $2300 or so.

Then when the second half of that year's property tax payment came due, it was STILL too low and we had to start paying around $2700 I think. I still don't know exactly how the mortgage company managed to screw up something as basic as knowing the correct property tax amount, I wouldn't have signed to buy the house if I had known that was going to be the monthly payment on it.

We ended up having to refinance after a while which brought it down to $2500 which hasn't changed in 3 years or so, but we're still barely scraping by every month.

The only upside is that our house value has gone up like 50% since we bought it, but that doesn't really help when trying to pay all the bills every month.
I would do anything to sell our house and move somewhere cheaper, but I don't think I'll ever be able to convince my partner to move away from here, living 30 minutes from the ocean and all the sunshine is pretty much non-negotiable with her.
And since every house in the area has also gone up 50%, if we sold this one and bought another, it's not like we'd be able to get a better deal unless we really, REALLY downgrade.

 

[Jason's Ultimatum]

The surge in insurance rates I understand...but if the property tax is increased because the value of the house has increased, how the heck is she not getting anything back with the sale? Realtor fees?

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Insurance is factored into your mortgage payments. Our home insurance went up again. Our escrow funds didn't have enough to cover it so now it's being averaged into our payments. Really sucks how our payments have gone up since we bought in 2021

 

[Iolo]

It would be my dream to only pay $4k in property taxes. Even a 2BR condo in the suburbs is $5k.

 

[louiedog]

This.

Also, you should never look at the public tax data for the house you are purchasing and think that is what YOU are paying when you buy it. There could be baked in rebates/sweetheart deals for the current taxpayer.

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My neighbor's house last sold in the 1950s and was passed on as inheritance with no major renovations. As a result the property tax is based on that 70-year-old appraisal. If it sold today, the taxes would be at least 20x what she's paying. Someone would be in for a very rude awakening if they made that mistake with that home.

 

[yellowfury]

Homeowners are already getting massive government subsidies in the form of favorable loan terms, mortgage interest deduction from income tax, and no capital gains tax on the profit from selling. So I wouldn't really worry about asking if property tax is unfair.

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Have to make a slight correction here- you get to exclude 250k of gain (500k if married) if you sell your residence that you lived in for 2 of the last 5 years. Mortgage interest deduction can also be limited based on your loan balance (750k after trump) and if you don't itemize your deductions it doesn't matter.

Obviously that's going to cover the majority of people but I felt the need to specify since I work in income taxes.

 

[Ghost Rider]

Nys has income tax and my property taxes in a nice suburb outside of Buffalo were 8k for school and county.

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I was going to say, NY has both and depending on where you are, property taxes can be insane. Our house is about 3k square foot on 1/3 acre and property/school taxes are just over 8k. My in-laws' house is the same size but they have 2 acre and overlook the Hudson River and their taxes are 20k. Both homes are in the same town, about 4 miles apart

 

[Doomguy Fieri]

Plenty of mortgage companies willing to make a deal with someone who will be spending north of 50% take home on their monthly payment. Even a minor increase to the escrow can turn that from a barely manageable stretch to literally unaffordable.

 

[whytemyke]

Ehhh. I don't think it's just the property taxes here. I get that its a lot to have your monthly bill go up by $167, but if that was the straw that broke the camel's back then that camel was already pretty lame. I'd love to see the initial loan docs because I'd be willing to bet she was pushed to purchase something that was barely within her means to begin with. So many people are mortgage illiterate that I wouldn't be surprised by that.

 

[Shadybiz]

Have to make a slight correction here- you get to exclude 250k of gain (500k if married) if you sell your residence that you lived in for 2 of the last 5 years. Mortgage interest deduction can also be limited based on your loan balance (750k after trump) and if you don't itemize your deductions it doesn't matter.

Obviously that's going to cover the majority of people but I felt the need to specify since I work in income taxes.

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Yep, and because the standard deduction increased with the Tax Cuts act, close to 90% of people just take the standard deduction, so mortgage interest deductions are irrelevant for the majority of people.

 

[lunarworks]

Why is property taxed in the first place? Haven't your dollars spent buying the house already been taxed?

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Local services and infrastructure upkeep don't pay for themselves. Unless you want a separate bill for roads, police, fire department, etc.

 

[Tendo]

Something is missing, or she overbought. 2k shouldn't force you into selling your home. What was she going to do if she needed a new roof? A new bathtub? Sounds like she went house broke. Just because a bank will give you the loan doesn't mean you should take it.

Not doubting the validity of property tax jumping that much, and we've had enough threads here about homeowners insurance problems in FL too. Just seems she overextended herself in a volatile market or something is left out.

Come to the burbs of KS…

Sky high income tax, sales tax, and property taxes! To be in the middle of effing nowhere, lol

Side note: people everywhere should be preparing for rocketing insurance rates. Pretty much every homeowner friend I have has seen insurance go up 30-50% in the last year or so.

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Central PA here and yup - Ours went up a good jump this year. Lack of available construction crews, material costs, property value adjustments. gettin hosed.

I'm glad I'm handy because simple home maintenance done by contractors in our area have shot up too.

It's very easy to find this info based on what they gave in the article. They gave her full name and county. That's enough to get the auditor records from any county's web site. Was built in 2022, sold in 2022, then she bought in 2023. Prior years you can see it had no building value only land value. Total market value jumped from 40K to 286K assessment. And she indeed does have the homestead exemption of ~50K.

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Ah there it is. I wondered if it was a new build. I've had a few friends get caught on this because they didn't realize the old property tax values are based on an empty plot and would increase greatly once you put a house on it.

 

[demosthenes]

Homeowners are already getting massive government subsidies in the form of favorable loan terms, mortgage interest deduction from income tax, and no capital gains tax on the profit from selling. So I wouldn't really worry about asking if property tax is unfair.

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Almost nobody gets mortgage interest deduction anymore.

 

[Gashprex]

I factored in the expected cost of increased property tax when I purchased.
The first year you don't get the Homestead exemption so the there's no cap to the increase so I knew it was going to be a big jump. By the 2nd year the cap is in place.

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That's actually not true - homestead Is a 3% cap increase and non-homestead is 10%

 

[FliX]

Ehhh. I don't think it's just the property taxes here. I get that its a lot to have your monthly bill go up by $167, but if that was the straw that broke the camel's back then that camel was already pretty lame. I'd love to see the initial loan docs because I'd be willing to bet she was pushed to purchase something that was barely within her means to begin with. So many people are mortgage illiterate that I wouldn't be surprised by that.

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It's also ruthless mortgage brokers that don't inform their clients of these things.

 

[Tendo]

It's also ruthless mortgage brokers that don't inform their clients of these things.

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I walked away from my first real estate agent and broker because they would not stop pushing much more expensive homes on me. "But you are approved to borrow a 100k more than you are looking at!"

Like - did they expect me to forget 2008 happened? Gimme that comfortable living in my means home any day.

 

[WardFail]

Ehhh. I don't think it's just the property taxes here. I get that its a lot to have your monthly bill go up by $167, but if that was the straw that broke the camel's back then that camel was already pretty lame. I'd love to see the initial loan docs because I'd be willing to bet she was pushed to purchase something that was barely within her means to begin with. So many people are mortgage illiterate that I wouldn't be surprised by that.

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This is probably the most realistic outcome. Buying a house isn't a singular lump sum of money, you need a healthy line of open credit and cash liquidity for the foreseeable future. It sounds like this person would have been one unexpected house repair bill away from foreclosure, negatively impacting the overvalue of the house, or impacting the quality of life for those in the household

 

[Culex]

I walked away from my first real estate agent and broker because they would not stop pushing much more expensive homes on me. "But you are approved to borrow a 100k more than you are looking at!"

Like - did they expect me to forget 2008 happened? Gimme that comfortable living in my means home any day.

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Lesson is never use a mortgage broker and just do a quick online 30 second search, then just drive to the bank. Brokers will always try to refer you to the highest paying lead. Many will get a cut of proceeds.

 

[Jason's Ultimatum]

Ehhh. I don't think it's just the property taxes here. I get that its a lot to have your monthly bill go up by $167, but if that was the straw that broke the camel's back then that camel was already pretty lame. I'd love to see the initial loan docs because I'd be willing to bet she was pushed to purchase something that was barely within her means to begin with. So many people are mortgage illiterate that I wouldn't be surprised by that.

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Exactly. This story doesn't add up at all

 

[hyouko]

Joining the chorus here of "if an extra $2k per year is a dealbreaker, you were not ready to be a homeowner." There's all kinds of unexpected things you might have to pay for that insurance won't cover - for example, a tree fell in my yard last year during a storm and I spent well over $2K getting it removed and then replacing the fence it crushed. Or maybe an important appliance goes out and needs replacing (try living in Florida without A/C for a few days in summer...)

Now, I could also see insurance rates going up being a problem, there have been all of those stories about FL insurance companies bowing out because of all the problems they face there.

Regarding the author's bad math: they did $4,700 / $2,700 = 1.74 and assumed that equated to a 174% increase. They should have done ($4,700 - $2,700) / $2,700 = 0.74 (or 74%). (New - Old) / Old = percent change!

 

[Futureman]

Our mortgage went up $500/mo last year in PA (from $1300 to $1800!). House got reassessed. Though I think only like $300 of that is from the reassessment and $200 from an escrow shortage?

Don't totally understand it and I've asked around ha, but hoping it goes down $200/mo after the year of covering the shortage.

 

[Tendo]

Lesson is never use a mortgage broker and just do a quick online 30 second search, then just drive to the bank. Brokers will always try to refer you to the highest paying lead. Many will get a cut of proceeds.

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No doubt. Thats what I ended up doing. Thank you local credit union!

 

[Kill3r7]

Stories like this always sensationalize the issue. Their tax bill was ridiculously low because it was a new build. What did they think was going to happen? Folks in the North East are paying close to what she was paying yearly every month.

 

[Krauser Kat]

im kinda happy chicago fucks us with forcing us to use real estate lawyers for any home/mortgage transaction because its an expert that answers all your questions during the sale.

 

[smisk]

Yeah this doesn't make much sense to me.. Why not rent out a room, or drive for uber on the weekends. It sucks, but it's an extra $166 a month - if she was spending every dime on the mortgage she wouldn't have qualified in the first place, surely there's places this person could cut back.

 

[dallow_bg]

That's actually not true - homestead Is a 3% cap increase and non-homestead is 10%

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That is state dependent.
I guess I should have said that in Texas it's this way to clarify.

Pretty cool you have a cap of 10% with no exemption.
Here the Homestead cap is only 10%. Would love 3%!

 

[CrichtonKicks]

Don't totally understand it and I've asked around ha, but hoping it goes down $200/mo after the year of covering the shortage.

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That's not going to happen. Escrow shortages happen because things like property taxes and insurance go up so more money has to be set aside to cover those from your escrow account. The $200/mo increase is essentially the new normal and it's unlikely to go back down.

You do have the option to pay the escrow short up front if you would rather it not increase your monthly payment.

 

[Euphoria]

Too many posts in here with the "If $2K breaks you then...".

Acting as if buying a home instantly means someone is rich and can afford additional thousands of dollars due being thrown at them. It can be $2k this year, then $1k next year while raises don't nearly line up with the increased costs.

Zero understanding that home ownership costs go beyond just taxes and a mortgage payment.

 

[Planx]

Why is property taxed in the first place? Haven't your dollars spent buying the house already been taxed?

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Can you go and make more land?

Let's say you're John Q Landlord, you own some property in a downtown. One of them is a vacant lot. What incentive do you have to spend money improving that lot when you can sit on it and let it appreciate as an asset? What incentive do you have to keep your buildings in good condition if you can be a slumlord and still make a profit?

Property tax incentivizes making productive use of land in valuable areas. If you're not using the land for something productive, you're still paying taxes on it based on the value of surrounding property. You're incentivized to do something with it or sell it to someone who will.

 

[thewienke]

Stories like this always sensationalize the issue. Their tax bill was ridiculously low because it was a new build. What did they think was going to happen? Folks in the North East are paying close to what she was paying yearly every month.

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Oof that's just poor planning. She couldn't have possibly thought she'd be paying the taxes for raw ground for a while?

Some states do an immediate reassessment whenever a piece of property is sold also. I've seen that burn some business owners in the commercial RE world.

 

[Saganator]

I'm annoyed this got a news story. There's dozens of other stories about people struggling with their taxes and rising insurance they could run, but they choose the one where someone's taxes went up by a whopping $2k annually.

 

[NR1]

Does Florida not have a property tax increase cap?

In Texas, the county tax appraisal district is limited to 10% increases year-to-year… at least if the house is homestead.

Even with the homestead cap, Texas property taxes have been and are getting even more insane.