Purchasing a new construction home in Texas is an exciting milestone, but it can come with surprises—especially when it comes to property taxes. New homes often experience significant tax increases after the first year, which can lead to unexpected payment hikes if you’re not prepared.
Let’s explore why these tax jumps occur, how they affect your mortgage payments, and strategies to minimize their impact. Can we schedule 15 minutes to talk about this in detail? Please choose a time that works for you here: http://bit.ly/3pWqxy7.
Why Do Tax Jumps Happen in New Construction Homes?
In Texas, property taxes are based on the assessed value of your home, which is determined by the county appraisal district. When you purchase a new construction home, the property may initially be taxed based on the land’s value or an incomplete structure. Once the appraisal district updates the property to reflect the full value of your completed home, your tax bill can increase significantly.
These tax jumps can catch new homeowners off guard and lead to a steep increase in escrow payments. Want to learn how to prepare for this? Let’s chat! Schedule 15 minutes with me here: http://bit.ly/3pWqxy7.
How Tax Jumps Affect Your Mortgage Payments
Mortgage lenders collect property taxes through your escrow account, adjusting your monthly payment to ensure taxes are covered. A sudden increase in property taxes can result in:
- Escrow Shortages: If your escrow account doesn’t have enough funds to cover the higher tax amount, your lender may require a lump sum payment or adjust future escrow contributions.
- Higher Monthly Payments: To make up for the difference, your monthly payment may increase substantially, straining your budget.
Let’s discuss how to avoid these issues. Please schedule a quick call here: http://bit.ly/3pWqxy7.
Strategies to Avoid Extreme Tax Jumps
Here are some tips to prevent payment shock from property tax increases:
1. Budget for the Full Assessed Value
When purchasing a new construction home, ask the builder or your agent for an estimate of the property’s full assessed value once completed. Use this value to calculate your expected tax bill and budget accordingly.
Want help estimating these costs? Let’s connect! Schedule 15 minutes to talk here: http://bit.ly/3pWqxy7.
2. Verify the Current Tax Status
Check with the local appraisal district to determine if the property is taxed at its full value or only the land value. Understanding its current status helps you anticipate changes.
Need assistance with this process? I’d be happy to guide you! Schedule a time to chat here: http://bit.ly/3pWqxy7.
3. Save for Potential Increases
Consider saving the difference between your current escrow payment and the estimated payment based on the full value. This buffer can help you cover any shortfalls or increased payments.
Let’s discuss how to create a solid savings plan for this. Schedule a call here: http://bit.ly/3pWqxy7.
4. Appeal the Appraised Value
If the county appraisal district overvalues your property, you have the right to appeal. This process can potentially lower your property taxes and reduce your payment. Check out these step-by-step guides on how to file a property tax protest:
Curious about how to get started? Let’s chat! Schedule 15 minutes here: http://bit.ly/3pWqxy7.
5. Review Homestead Exemptions
Texas offers homestead exemptions that can reduce your property tax burden. Be sure to apply for exemptions like the general homestead or exemptions for seniors, veterans, or individuals with disabilities.
Not sure which exemptions you qualify for? Let’s connect! Schedule a quick call here: http://bit.ly/3pWqxy7.
Plan Ahead for a Smoother Transition
Understanding and preparing for potential tax jumps with new construction homes can save you from financial stress. By budgeting for the full assessed value, saving for potential increases, and exploring options like appeals and exemptions, you can avoid extreme hikes in payments.
If you’d like to dive deeper into these strategies or need help navigating the process, let’s schedule a 15-minute chat. Please choose a time that works for you here: http://bit.ly/3pWqxy7.