When Do You Start Paying Property Taxes on New Construction?

 

Property taxes can significantly concern homeowners and contractors regarding new construction. When you begin paying your property taxes for new construction depends on many factors. These include local tax laws, the state of construction, and other variables. Keep in mind the following:

1. Property Assessment Timing

Property taxes in most places are calculated based on the home's assessed value. In the case of new constructions, property taxes are estimated at either the completion or purchase date of the building. You may be only taxed on land value until the house is completed.

2. Partially Assessing Construction

Some municipalities issue partial assessments during construction. You may be required to pay taxes on your home's improved value, such as the foundation, frame, etc, even before your home is finished. The local government will start receiving tax revenues before the assessment has been completed.

3. Complete Assessment after Completion

The property is subjected to a complete assessment once the building work has been completed. The total value of both the property and land will be reflected in this assessment. The property tax will now reflect the total value of the new home.

4. The first tax bill is due

Your local tax cycle will determine the due date of your first tax bill. This may be quarterly or even annually. It is possible that homeowners will not receive the first property tax bill for several months, depending on how assessments are made.

A tax advisor such as Lytaxadvisor can provide specific guidance.

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