By: T.R. Smith, Esq.
One of the most common surprises for Florida homebuyers comes after closing, when they discover that their property tax bill may be significantly higher than the seller’s current taxes. Beginning February 1, 2027, a new Florida law is designed to give buyers a more realistic picture of potential property taxes before they purchase a home.
For both buyers and sellers, understanding this change can help avoid confusion about one of the most significant ongoing costs of homeownership.
Why the Seller’s Current Tax Bill Can Be Misleading
A buyer may see that the seller currently pays $4,000 per year in property taxes and assume that his or her taxes will be approximately the same after purchasing the property. Unfortunately, that may not be the case.
A longtime Florida homeowner may have benefited from years of Save Our Homes assessment limitations. The seller may also have exemptions that will not automatically transfer to the buyer. As a result, the seller’s assessed value can be substantially below the property’s current market value.
Following a sale, the property is generally reassessed for the following tax year. This reassessment can result in a significant increase in property taxes for the new owner.
What Changes Beginning February 1, 2027?
Beginning February 1, 2027, Florida law will require certain online residential property listings to provide prospective buyers with an estimate of the property’s ad valorem taxes. Importantly, the estimated taxes are not intended to be based upon the current owner’s assessed value or existing property tax bill. Instead, the estimate generally uses the property’s listing price and applicable millage information.
The purpose is to give buyers a more realistic estimate of what property taxes could look like after purchasing the property. The law also generally restricts the inclusion of the current owner’s property tax amount in printed listing materials. This is important because the seller’s current tax bill may bear little resemblance to what the buyer ultimately pays.
What Buyers Should Know
Property taxes can be a significant part of the monthly cost of owning a home, particularly when taxes are included in the buyer’s mortgage escrow payment. A buyer who budgets based upon the seller’s existing property taxes could underestimate the actual monthly cost of the home. After the property is reassessed, a substantial tax increase could result in a higher escrow requirement and, consequently, a higher monthly mortgage payment.
The new estimated tax information should provide buyers with a better starting point for evaluating affordability. However, buyers should remember that the amount shown is still only an estimate. Actual property taxes can be affected by the final assessed value, millage rates, homestead and other exemptions, portability benefits, special assessments, and other factors.
What Sellers Should Know
Sellers should also understand that their existing property tax bill may not accurately represent the taxes a buyer will pay after purchasing the home. This is particularly important for sellers who have owned their homes for many years and have benefited from the Save Our Homes assessment limitation. A relatively low tax bill can be an advantage for the current owner, but those tax savings generally do not transfer to the purchaser.
Sellers should therefore be cautious about representing their current property tax amount as an indication of what a prospective buyer should expect to pay.
The Takeaway
Whether you are buying or selling a Florida home, do not assume that the current property tax bill will remain the same after the sale. Beginning February 1, 2027, Florida’s new property tax listing requirements are intended to give prospective buyers a better starting point for understanding potential property taxes. Buyers should use the estimated amount as part of their overall affordability analysis while recognizing that their actual tax bill may differ.
Sellers should likewise understand why their current taxes may be substantially different from those ultimately assessed against the new owner.
Understanding the potential tax consequences before closing can help prevent an unwelcome surprise when the first property tax bill arrives. For additional information regarding property taxes and your Florida real estate transaction, contact your trusted real estate attorney.
It matters who you work with.
