Why Your Property Taxes Jump After Closing (And How to Prepare for It)

One of the biggest surprises for new homeowners, especially first-time buyers, is a sudden increase in property taxes after closing. I see this happen often in Broward County, and it can be stressful when a mortgage payment jumps by hundreds of dollars almost overnight. The good news is this increase is usually predictable, and with the right planning, it can often be managed.

This article explains why property taxes increase after you buy, how to estimate your future taxes before making an offer, when the increase typically happens, and what you can do if your payment suddenly becomes unaffordable.

Why Property Taxes Increase After You Buy a Home

When you purchase a home in Florida, the property taxes you see on a listing or tax record are based on the previous owner’s assessed value and exemptions—not yours.

Here’s what typically happens:

• The property may have had a long-time owner with capped increases under Save Our Homes.
• Once the home sells, the assessed value resets to market value as of January 1 following the purchase.
• The previous owner’s homestead exemption does not transfer to you.

This reset can cause property taxes to increase significantly, even if the purchase price felt reasonable.

When to Expect the Tax Increase

This is where many buyers get caught off guard.

• If you buy a home in Year 1, your taxes for that year are usually based on the previous owner’s assessment.
• In November of the following year, the tax bill reflects your new assessed value based on the purchase price.
• Shortly after that tax bill is issued, your lender performs an escrow analysis.

A Real-World Example

Here’s how this can play out:

• Year of purchase: Property taxes on record are $1,900 (based on the prior owner).
• Your lender escrows for $1,900, spreading that amount across your monthly payments.
• The following November, the new tax bill is issued for $7,400 after the assessment resets.

Now the lender is facing two issues:

1. There is not enough money in escrow to pay the $7,400 tax bill.
2. The lender must also prepare for next year’s higher taxes.

As a result, your monthly payment may increase sharply because the lender needs to:

• Cover the escrow shortage
• Pay the current higher tax bill
• Build a new escrow balance for the following year

This is how homeowners can see their mortgage payment increase by hundreds of dollars per month, even though nothing else about their loan changed.

Why Lenders Often Underestimate Your Future Taxes

Most lenders set up escrow accounts using the current tax bill on record, even when they know taxes will increase.

So even if you expect higher taxes, your lender may still:

• Collect escrow based on the lower, previous-owner tax amount
• Be forced to raise your payment sharply once the real bill arrives

This is why buyers sometimes experience a larger increase than expected, even when they planned for higher taxes.

How to Estimate Your Future Property Taxes Before Making an Offer

Before you submit an offer, you should always estimate what the property taxes will look like after the reset.

Step 1: Visit the Broward County Property Appraiser Website

Go directly to the Broward County Property Appraiser’s website:
https://bcpa.net

Search for the property by address.

Step 2: Review the Current Assessment

Pay attention to:

• Current assessed value
• Current exemptions (such as homestead)
• Market value

Step 3: Use the Tax Estimator

On the Property Appraiser’s website, use the Tax Estimator / Tax Calculator tool. This tool allows you to:

• Enter an estimated purchase price
• Apply a homestead exemption
• See an estimated future tax amount based on current millage rates

This gives you a much more realistic picture of what your property taxes may look like after the assessment resets.

Estimating Homesteaded vs. Non-Homesteaded Taxes

If the home will be your primary residence, you should estimate both scenarios:

• Without homestead (worst case)
• With homestead exemption (more realistic long term)

This helps you understand:

• The true monthly cost
• How much savings homestead provides
• Whether the payment is comfortable for your budget

Why This Matters Before You Make an Offer

Your purchase price may be approved by the lender—but that doesn’t mean the payment is comfortable long term.

Before submitting an offer, ask yourself:

• Can I afford this payment after taxes reset?
• Do I still feel comfortable if my mortgage increases by several hundred dollars?

If the answer is no, it’s better to adjust expectations before you’re under contract.

What You Can Do to Prepare for the Increase

1. Add Extra Funds for Escrow — at the Right Time (If Your Lender Allows)

If you expect your taxes to increase after the assessment resets, the timing matters.

In many cases, the first year after you close, your mortgage escrow is still collecting based on the prior owner’s lower tax bill. If you pay too much extra escrow during that period, you may end up with an escrow overage, and your lender could refund the surplus after the next escrow analysis.

A smarter approach (if your lender allows additional escrow payments) is to start building a cushion in the year you will be paying your first “new-owner” tax bill—the bill that typically comes out in November after the assessment reset.

What this does:

• Helps your escrow account have more funds available when the higher bill arrives
• Can reduce (or sometimes prevent) a large escrow shortage
• May soften the monthly payment increase that happens after the escrow analysis

Important: Every lender handles escrow differently, so ask:

• Whether they allow extra escrow deposits
• How those deposits will be applied
• Whether any excess would be refunded during the next analysis

Another Option: Save the Money Yourself and Pay the Shortage in a Lump Sum

If your lender does not allow extra escrow payments—or you prefer more control—another practical option is to simply save for the expected increase.

Here’s how that helps:

• When the lender sends the escrow analysis and shortage notice (after the higher taxes are billed/paid), you can often choose to pay the shortage amount in one payment.
• Paying the shortage up front can help you avoid (or reduce) a large monthly payment increase.

This strategy works well for homeowners who want to prepare ahead of time without putting extra funds into an escrow account that may later be adjusted or refunded.

2. Apply for Homestead Immediately

• Apply as soon as you’re eligible
• Deadline is typically March 1
• Even if you miss the deadline, applying sooner helps with future caps

Homestead not only reduces taxable value but also limits how fast taxes can increase over time.

3. Review Your Escrow Analysis Carefully

When you receive your escrow statement:

• Review the tax amounts used
• Confirm the new projected payment
• Ask your lender if a spread-out shortage repayment is an option

Sometimes lenders can extend how quickly the shortage is repaid, lowering the monthly impact.

4. Consider Refinancing (If Rates Allow)

If:

• Interest rates have dropped
• Your payment has become unaffordable

A refinance may:

• Lower your interest rate
• Offset the tax increase
• Provide breathing room in your monthly budget

This isn’t always the right solution, but it can help in the right market conditions.

5. Adjust Insurance Where Possible

While taxes are often the biggest increase, insurance also affects escrow.

You may be able to:

• Shop homeowners insurance
• Adjust deductibles
• Review coverage limits

Small savings here can help balance out higher taxes.

Key Takeaway for First-Time Home Buyers

Property taxes are not static. What you see today is often not what you’ll pay tomorrow.

The best protection is:

• Education
• Proper estimates
• Planning ahead

Understanding how taxes reset after closing can help you avoid surprises and make smarter buying decisions.

Need Help Estimating Property Taxes Before You Buy?

If you’re thinking about purchasing a home and want help estimating your true long-term payment, we are happy to walk you through the numbers before you make an offer.

Planning ahead can make the difference between loving your home and stressing over your payment.