ABA Family Legal Guide

Buying and Selling a Home

Tax Considerations

Tax Considerations When Buying Your Home

Will my purchase of a home affect the real estate taxes?

Depending on how your state assesses property, a purchase can affect the amount of property taxes to be paid. For example, in some states, property tax increases occur only when a home changes ownership. The tax assessor reassesses the home using the price paid as its new value; in some cases, the taxes may skyrocket. Alternatively, many states reassess property every three or four years. If you are buying the home at the end of that cycle, you may see a large increase in property taxes at the start of the new cycle. While the amount of tax may not be the deciding factor in your decision to buy, you will want to take it into account in determining your total monthly housing costs.