Will My Property Tax Go Up After I Buy? What Happens to the Seller's Caps and Exemptions

Your property tax can go up after you buy a home. A sale can remove the seller’s tax benefits and increase the value used to calculate the bill. In Florida, for example, the seller’s assessment cap generally ends, and the home is valued at market value the following January 1¹. The tax shown on a listing reflects the current owner’s situation. Your bill may be higher, even if the increase does not appear right after closing.

Why the seller’s bill is not your bill

We cover the basics in our guide on hidden costs to explain why the property tax on the listing isn’t necessarily yours. In short, a cap limits how quickly a home’s value can rise for tax purposes. Over time, that value can fall well below market value¹. When the home sells, many states end that cap, and the new owner starts over.

Below, we explain the rules using official sources and show what to check before making an offer. An assessment is the official valuation used for taxes. The caps discussed here generally limit that value’s growth. Tax rates and other charges can still change what you pay.

What happens to the seller’s cap when a home sells

These examples cover ordinary home purchases, not every type of ownership transfer. Some family transfers and other transactions qualify for exceptions¹³⁷. Other states have assessment limits too. Use current state and local guidance to check a specific purchase.

California: reassessed at the sale, then a supplemental bill

In California, when a home is sold, Proposition 13 requires the county assessor to reassess it to its current fair market value as of the date ownership changed³. In most home purchases, the whole property is reassessed³. If the market value is lower than the seller’s adjusted value, your taxes go down instead³.

The surprise for many buyers is the supplemental bill. The reassessment takes effect right away through a separate bill that covers the period from the first day of the month after the sale to the end of the fiscal year, June 30⁴. If you buy between January 1 and May 31, you can get two supplemental bills, including one for the following fiscal year⁴. A lower assessment may produce a refund instead⁴.

Lenders do not receive supplemental bills, even when they pay your annual bill from an escrow account⁴. The bill goes to you, and the state does not excuse late penalties caused by a mix-up with your lender⁴.

Before you offer: Ask the county assessor what the home’s value is likely to be at your price, and set money aside for a supplemental bill. When it arrives, pay it or ask your lender in writing who will.

Florida: Save Our Homes ends, but portability can help

Florida’s Save Our Homes cap starts in the year after a home first receives a homestead exemption. It limits annual assessment increases to 3% or inflation, whichever is lower. A typical sale removes that protection for the following January 1¹.

The Florida Department of Revenue says many first-time Florida homeowners are surprised when their bill is higher than the previous owner’s². The seller’s exemption and Save Our Homes benefit stay with the home for the rest of the calendar year you buy in, so your first bill may still show them².

The state’s 2024 brochure illustrates this with a September purchase. The home’s assessed value was $110,000² and its taxable value $60,000 under the seller². After the new assessment and the buyer’s own homestead exemption, the assessed value rose to $130,000² and the taxable value to $80,000².

If you are moving from one Florida homestead to another, portability may let you carry all or part of your old Save Our Homes benefit to the new home¹. You must set up the new homestead within three years of January 1 of the year you left the old one, not three years after the sale¹. You file the transfer form with your homestead application by March 1¹.

Before you offer: Compare the home’s market value and assessed value on the county property appraiser’s website. A large gap can signal a substantial increase after purchase².

Maryland: the homestead credit stops, and you apply for your own

Maryland’s Homestead Tax Credit limits annual increases in the assessment subject to tax on an eligible main home. State law requires county and municipal limits of 10% or less⁵.

A buyer does not keep the seller’s accumulated credit. Your bill is based on the property’s applicable assessment without that credit. You may qualify for protection against later increases, but that does not preserve the seller’s lower starting point⁶.

You must apply to establish your eligibility. SDAT says it mails applications after updating its records for a purchase, and the person handling settlement must provide information about the credit⁵.

Before you offer: Look up the home on the state’s Real Property search⁵ and ask the local assessment what value will apply without the seller’s credit. Plan to file your homestead application soon after you move in.

Michigan: the taxable value “uncaps” the year after you buy

Michigan generally limits annual growth in taxable value to 5% or inflation, whichever is lower, excluding additions and losses. After a typical sale, that limit is removed for the following calendar year⁷. Taxable value then equals that year’s state equalized value, which represents 50% of the home’s estimated market value⁸.

Michigan law does not let the assessor simply use your price. The State Tax Commission says the assessor must value a sold home the same way as homes that did not sell, and may not automatically set its value at half the sale price⁸.

Michigan also has a principal residence exemption, which exempts your main home from the local school operating tax of up to 18 mills, or $18⁹ per $1,000⁹ of taxable value. Ask your city or township assessor how to claim it for your new home.

Before you offer: Ask for an estimate of next year’s state equalized value. The current figure can help you plan, but next year’s figure determines the value after the cap ends⁸.

Other states where the cap ends at the sale

• Texas. The 10% homestead cap limits annual growth in appraised value, excluding new improvements¹⁰. That limit starts on January 1 of the tax year after the owner qualifies for the homestead exemption, and ends on January 1 after the owner stops qualifying¹⁰. In other words, the seller’s cap does not carry over. Yours starts once you qualify.
• Oklahoma. Taxable value can rise no more than 3% a year¹³ for homesteads and farmland, and 5% for other property¹³. The limit lasts only as long as title is not transferred¹². Tulsa County warns that a buyer’s bill can rise substantially when the seller’s capped value is replaced with market value¹³.
• New Mexico. Bernalillo County’s assessor says a buyer may pay on the seller’s value in the year of purchase, which is often below market value because of the 3% cap¹⁴. The value is brought to market value the next tax year¹⁴.
• South Carolina. Counties reappraise every five years, and those increases are limited to 15% within five years¹⁵. A sale or other “assessable transfer of interest” triggers a new appraisal, and the 15% cap does not apply in that year¹⁵.
• Arkansas. A homestead’s taxable value can rise only 5%¹⁶ a year until it reaches full assessed value. Values are reassessed when a home is sold²¹.
• District of Columbia. The Assessment Cap Credit limits the taxed increase to 10 percent a year¹⁷. A buyer gets the seller’s cap credit only for the tax half in which the home was bought. Their own cap usually starts within a year of applying for the Homestead Deduction¹⁷.

Reassessed at sale, or on a schedule?

Two processes can affect a home’s assessed value, and some places use both.

At the sale. California generally uses market value at the purchase date³. Florida and Michigan generally apply the value change resulting from the sale in the following year¹⁷.

On a schedule. Maryland reassesses each property every three years and phases in increases over three years⁶. South Carolina generally reappraises countywide every five years¹⁵. A sale can separately remove a Maryland credit or trigger a South Carolina appraisal⁶¹⁵.

Where a sale does not trigger a reset, the existing assessment may remain until the next valuation. Your bill can still change because of new tax rates, reassessment, or a change in exemption eligibility.

The seller’s exemption does not move to you

A homestead benefit usually applies to an eligible owner’s main home. An exemption reduces the value subject to tax; a credit reduces the bill. Some benefits remain on the property for the rest of a tax year, but you should not assume they will continue under your ownership²¹⁶. Here is what buyers need to check:

• Florida. Qualifying owners receive a $25,000¹⁸ exemption that applies to all taxes, including school taxes, plus an additional exemption for non-school taxes. For 2026, that additional amount is $26,411¹⁸. Generally, you must own and occupy the home on January 1 and apply by March 1². Florida voters decide on November 3, 2026 whether to change these exemptions from 2027; check the current amount with your county property appraiser¹⁸.
• Texas. Apply to the county appraisal district. The general deadline is before May 1¹¹. A buyer who qualifies after January 1 may receive a partial-year exemption if the seller did not receive the same exemption that year¹¹.
• Maryland. Apply once for the Homestead Tax Credit⁵. The standard deadline is May 1 before the first tax year for which the credit is allowed; ask SDAT which year applies to your purchase⁶.
• South Carolina. Apply for the main-home classification, which generally uses 4%¹⁵ of market value instead of 6%, but only after the owner applies and the county assessor approves¹⁵.
• Arkansas. Apply through the county assessor. The homestead credit is up to $500¹⁶ a year, and the state has allowed up to $600¹⁶ starting with 2026 tax bills. It reduces the tax bill, not the property’s assessed value¹⁶.
• District of Columbia. Apply for the Homestead Deduction. Approved applications filed October 1 through March 31 qualify for the full tax-year benefit; April 1 through September 30 filings receive half¹⁷.
• California. The homeowners’ exemption removes up to $7,000⁴ from taxable value. If the seller had not claimed it, moving in within 90 days may qualify you for supplemental-tax relief⁴. File your claim as soon as you get the supplemental notice; your county assessor sets the deadline.
• New Mexico (Bernalillo County). The head-of-family exemption reduces taxable value by $2,000 for qualifying owners. The usual application deadline is 30 days after the assessor mails the Notice of Value. Check the notice rather than assuming an April deadline¹⁴.

Before you offer: Find the application and eligibility rules on the official assessment office website. Note both the filing deadline and the date by which you must own and occupy the home. Timing matters, for example, in Florida, the exemption shows on that year’s bill only if you apply by March 1².

How to estimate your own bill

Use official records and local tax calculators to estimate the cost before making an offer:

1. Find the local tax rate. Ask the local tax office for the rates that apply to the address. Rates are written in different ways. For example, Maryland’s example uses dollars per $100 of value⁵, and South Carolina uses mills, where a mill is one-thousandth of a dollar¹⁵.
2. Estimate the value after the sale. Ask the assessor how the purchase will affect the assessment. In a state where the cap ends at sale, expect the home’s taxable value to move toward its market value. Michigan, for example, warns that the new value is set by the assessor, not copied from the price⁸.
3. Apply the exemptions you qualify for. Subtract approved value exemptions before calculating tax, and deduct tax credits afterward. Check each benefit’s rules: an exemption may apply to some taxes but not others⁹.
4. Calculate the tax. Multiply the taxable value for each taxing authority by its rate, then total the amounts. For example, in Michigan, the taxable value multiplied by the millage rate gives the property tax⁸. Maryland’s own example uses a rate of $1.04⁵ per $100⁵: on $10,000⁵ of value, that is $104⁵.
5. Confirm with the assessor or tax office. Florida’s Department of Revenue suggests asking the county property appraiser’s office before you buy, and notes that some appraisers’ websites can estimate your tax².

If your taxes are paid through escrow, a higher tax bill after the sale also raises your monthly mortgage payment, because escrow is the part of your payment set aside for expenses such as taxes and insurance²⁰. Budget separately for any supplemental bill that the lender will not cover⁴.

Before you offer: Repeat this calculation for each home on your shortlist. Compare the expected annual tax and divide it by 12 to see its effect on your monthly budget.

How Ampian AI checks this

Official records and local tax offices establish the assessment, eligibility rules, and tax charges for each home. Online calculators can help you plan, but their estimates are not final bills.

The Ampian AI True Cost Forecaster bases the property tax line on the purchase price rather than the seller’s bill. In our free True Cost Forecaster sample report, the early-1900s Dorchester house shows property taxes of $9,384¹⁹ to $14,292 a year¹⁹. The sample uses the purchase price as an estimate of market value. It assumes you will live in the home as your main residence, so it applies a residential (homestead) exemption¹⁹.

Use the forecast range to compare homes and plan your budget, then confirm the local assessment and any exemptions you qualify for. You still need to complete any required exemption application. Plans and report prices are on our Pricing page.

For the other costs a listing leaves out, see the hidden costs of owning a home and our home buyer due diligence checklist.

Frequently asked questions