Hello. When does the newly assessed value take effect? I closed on a newly constructed home in Aug 2021. So i'm currently only paying taxes on the land. When should I expect to be paying taxes on the improved land (full value)? I've been putting money aside based on the appraised value of the home to cover the "simulated" property tax bill to avoid the payment shock when it becomes realized. But if the property is reassessed on Jan 1, will the new value take affect in March? April? Does that make sense?
Hi, during the closing costs of my new build they gave me an estimation of the taxes for future payments, now that I got my house assessed by the county the taxes are actually lower then estimated. Does that mean my mortgage payment can possibly go down next year? It's a $65 difference.
Hi Pinkstar. In theory, yes. But it’s a little complicated in that your mortgage company will do an escrow analysis (yearly, around your anniversary time frame). The escrow analysis will determine the minimum threshold you must keep and whether the amount that is expected to be in escrow during the next year exceeds it. If it does, then your mortgage will go down, otherwise it might go up. I would venture that it might stay the same if your mortgage company is expecting the home insurance to go up annually. It evens the $65 difference out. Big picture, yes it can go down. Detail level it might be a wash or go up a little in anticipation of insurance or taxes going up in the following year.
With my situation, we closed on a new construction home on 3/3/2023 but received an assessed value for all improvements even though the house was not completed on 1/1/2023. The builder credited me taxes for January and February at an “unimproved” rate. Am I now going to get a bill from the county for a full 12 months based on my assessed value? My other 2 new construction homes we paid based on unimproved land the first year, not sure why the county assessed it as improved this first year. Do you think the county messed up?
One of the issues we're facing right now in Texas is that in many cases the X2 market value is much higher than the X1 purchase price. Is there anything limiting the X2 assessed value to the X1 purchase price, or is the new homeowner potentially going to be hit with much higher taxes than anticipated and no homestead cap (since they didn't live in the property Jan 1, X1)?
My situation that I can not find the answer for, Maybe you can help me.... I'm having a home built in a community in north Austin. I signed the contract with the builder on dec 13th 2020. They did not start building but they estimate it will be done and we will close in September. We are buying the house cash and will not have an escrow account. Here are my questions... Will be have to pay any taxes at closing? Are we only responsible for the taxes from September to January? Will the taxes be for the land amount assessed in jan 2021 or the home value at closing in sept 2021? I know that for 2022 taxes it will be all different and much higher. I am just concerned about 2021 taxes, who pays what and when. I cant find any information that pertains to my situation. Thanks, I hope you can help, i'm just trying to understand all of this...
Hi Dana, Thanks for your question. So you are NOT responsible for property taxes from Jan - Sept. It will be based on the land value if the property was just dirt on January 1, 2021. So the taxes will most likely be minimal (in comparison to a full-year, with a home property taxes). However, your title company will credit to you the Jan 1 - Sept taxes at closing. So in essence, if the taxes would have been $2,000, you will get that $2,000 as a credit against your purchase. It's a little complicated, but hopefully this makes sense - let's assume without the credit against taxes you would have to come to the table in September with $15,000. When the title company credits you the taxes, you'll only need to come to the table with $13,000. The title company is not going to give you a check for $2,000 for taxes, so you'll need to save that $2,000 personally (essentially from that $15,000 you thought you needed to come to the table with). Then you will get a bill for the entire 2021 tax year (for example $2,800) and you will need to pay the entire $2,800 ($2,000 from Jan 1 - Sept and your portion of $800 Sept - Dec). So you are paying for the entire 2021 year, but the title company would have credited you the portion of the year you didn't own the property. The county will most likely send the bill to your builder, so you will need to go to Travis County treasurer's website (if you are actually in the city of Austin) and pay them directly. The due date, I believe, is January 15th of 2022, but because you are buying this year, my suggestion is to figure out with your CPA is it more advantageous to pay it before the end of 2021 or in 2022. I don't know how many points you're paying, but if you think that might put you in Itemized Deduction territory, it may be wise to pay it in 2021 and then pay your 2022 in 2023 (this is my CPA brain coming out so I apologize for a little bit more complexity). I am in San Antonio, so if you have any questions regarding real estate, I'm like 90 minutes away. If you have friends or family who are also moving to Austin and looking to purchase a home, I'd love to assist them (even if it is new build, you can use a realtor on a new build purchase too). If you have any more questions, don't hesitate to ask! Patrick
I closed on my new construction Dec 28th in Richmond,TX. I calculate at 3.121 tax rate to owe closer to 11k a year. The mortgage company is only charging 460 a month escrow. So i send an extra 600 on top of that each month. They just sent me an analysis report confirming thier previous rate of 460 a month. Here is my question, do you think they will come back at the end of the year and want back payment to get closer to the real amount?
Hey Plixie, so their $460 may be correct for the first year, but the following year it may not be $460. They can come back in the following year and get their money back, but it will usually be spread upon your next year's mortgage bill. So let's say you're $1,200 short, then your mortgage will go up $100 a month the following year. In the end, I don't necessarily think their $460 is incorrect because the first year you own the home usually the home is assessed at raw land value then the year after you move in the home is assessed as an actual home. The raw land is usually way less than if a home was built. So there should be a jump usually in one to two years. It's a little complicated because the timing of when you'll owe $11k is based on when the county assesses your home at or around your purchase price, which again might be 1 or 2 years later. Does that help? - Patrick
G-whiz, all of that rambling just to say if your property value goes up so will your mortgage payment, if you didn’t put enough in escrow?
Hello. When does the newly assessed value take effect? I closed on a newly constructed home in Aug 2021. So i'm currently only paying taxes on the land. When should I expect to be paying taxes on the improved land (full value)? I've been putting money aside based on the appraised value of the home to cover the "simulated" property tax bill to avoid the payment shock when it becomes realized. But if the property is reassessed on Jan 1, will the new value take affect in March? April? Does that make sense?
Thanks for the info 🔥 but i how a lot of more questions?
Hi, during the closing costs of my new build they gave me an estimation of the taxes for future payments, now that I got my house assessed by the county the taxes are actually lower then estimated. Does that mean my mortgage payment can possibly go down next year? It's a $65 difference.
Hi Pinkstar. In theory, yes. But it’s a little complicated in that your mortgage company will do an escrow analysis (yearly, around your anniversary time frame). The escrow analysis will determine the minimum threshold you must keep and whether the amount that is expected to be in escrow during the next year exceeds it. If it does, then your mortgage will go down, otherwise it might go up. I would venture that it might stay the same if your mortgage company is expecting the home insurance to go up annually. It evens the $65 difference out. Big picture, yes it can go down. Detail level it might be a wash or go up a little in anticipation of insurance or taxes going up in the following year.
With my situation, we closed on a new construction home on 3/3/2023 but received an assessed value for all improvements even though the house was not completed on 1/1/2023. The builder credited me taxes for January and February at an “unimproved” rate. Am I now going to get a bill from the county for a full 12 months based on my assessed value? My other 2 new construction homes we paid based on unimproved land the first year, not sure why the county assessed it as improved this first year. Do you think the county messed up?
How often are assessments done?
One of the issues we're facing right now in Texas is that in many cases the X2 market value is much higher than the X1 purchase price. Is there anything limiting the X2 assessed value to the X1 purchase price, or is the new homeowner potentially going to be hit with much higher taxes than anticipated and no homestead cap (since they didn't live in the property Jan 1, X1)?
My situation that I can not find the answer for, Maybe you can help me.... I'm having a home built in a community in north Austin. I signed the contract with the builder on dec 13th 2020. They did not start building but they estimate it will be done and we will close in September. We are buying the house cash and will not have an escrow account. Here are my questions...
Will be have to pay any taxes at closing? Are we only responsible for the taxes from September to January? Will the taxes be for the land amount assessed in jan 2021 or the home value at closing in sept 2021? I know that for 2022 taxes it will be all different and much higher. I am just concerned about 2021 taxes, who pays what and when. I cant find any information that pertains to my situation. Thanks, I hope you can help, i'm just trying to understand all of this...
Hi Dana, Thanks for your question. So you are NOT responsible for property taxes from Jan - Sept. It will be based on the land value if the property was just dirt on January 1, 2021. So the taxes will most likely be minimal (in comparison to a full-year, with a home property taxes). However, your title company will credit to you the Jan 1 - Sept taxes at closing. So in essence, if the taxes would have been $2,000, you will get that $2,000 as a credit against your purchase. It's a little complicated, but hopefully this makes sense - let's assume without the credit against taxes you would have to come to the table in September with $15,000. When the title company credits you the taxes, you'll only need to come to the table with $13,000. The title company is not going to give you a check for $2,000 for taxes, so you'll need to save that $2,000 personally (essentially from that $15,000 you thought you needed to come to the table with). Then you will get a bill for the entire 2021 tax year (for example $2,800) and you will need to pay the entire $2,800 ($2,000 from Jan 1 - Sept and your portion of $800 Sept - Dec). So you are paying for the entire 2021 year, but the title company would have credited you the portion of the year you didn't own the property. The county will most likely send the bill to your builder, so you will need to go to Travis County treasurer's website (if you are actually in the city of Austin) and pay them directly. The due date, I believe, is January 15th of 2022, but because you are buying this year, my suggestion is to figure out with your CPA is it more advantageous to pay it before the end of 2021 or in 2022. I don't know how many points you're paying, but if you think that might put you in Itemized Deduction territory, it may be wise to pay it in 2021 and then pay your 2022 in 2023 (this is my CPA brain coming out so I apologize for a little bit more complexity). I am in San Antonio, so if you have any questions regarding real estate, I'm like 90 minutes away. If you have friends or family who are also moving to Austin and looking to purchase a home, I'd love to assist them (even if it is new build, you can use a realtor on a new build purchase too). If you have any more questions, don't hesitate to ask! Patrick
I closed on my new construction Dec 28th in Richmond,TX. I calculate at 3.121 tax rate to owe closer to 11k a year. The mortgage company is only charging 460 a month escrow. So i send an extra 600 on top of that each month. They just sent me an analysis report confirming thier previous rate of 460 a month.
Here is my question, do you think they will come back at the end of the year and want back payment to get closer to the real amount?
Hey Plixie, so their $460 may be correct for the first year, but the following year it may not be $460. They can come back in the following year and get their money back, but it will usually be spread upon your next year's mortgage bill. So let's say you're $1,200 short, then your mortgage will go up $100 a month the following year. In the end, I don't necessarily think their $460 is incorrect because the first year you own the home usually the home is assessed at raw land value then the year after you move in the home is assessed as an actual home. The raw land is usually way less than if a home was built. So there should be a jump usually in one to two years. It's a little complicated because the timing of when you'll owe $11k is based on when the county assesses your home at or around your purchase price, which again might be 1 or 2 years later. Does that help? - Patrick
@@thesatxhome586 Yes it does, thank you
for taking time to answer.