Why Your Property Taxes Might Be Going Up
If you’ve received an escrow notice recently and your monthly mortgage payment suddenly increased, you’re not alone.
Many homeowners are seeing higher payments this year because of property tax adjustments.
This often happens with new construction homes or properties that were recently renovated or flipped.
Here’s why.
How Property Taxes Can Jump
Property taxes are based on the assessed value of your home as of January 1 of the tax year.
With new construction, the home is often not fully completed on January 1, which means the initial tax assessment may be much lower than the final value.
For example:
| Item | Amount |
|---|---|
| Original assessed value (unfinished home) | $350,000 |
| Updated assessed value after completion | $600,000 |
| Increase in taxable value | $250,000 |
| Typical tax rate | ~2% |
| Additional taxes due | ~$5,000 |
Many lenders initially calculate escrow payments using the lower assessed value, which means the tax bill later creates a shortage in the escrow account.
When that happens, lenders increase the monthly payment to:
• Cover the shortage from the previous tax bill
• Prepare for the higher tax bill going forward
This is why some homeowners suddenly see their mortgage payment increase by several hundred dollars per month.
What Homeowners Can Do
If your property taxes seem unusually high, you may have the option to protest the assessed value of your home.
Before doing that, it helps to know what homes like yours are actually selling for.
If you'd like, I’m happy to pull recent comparable sales for your neighborhood so you can see whether your current assessed value looks accurate.
Just reach out and I’ll send them over.
If You Want Help Appealing Your Taxes
Some homeowners prefer to hire a company that specializes in property tax protests.
One service many homeowners use is PropertyTax.io.
If you decide to use them, you can receive $10 off with my promo code: C84879
Questions About Your Home’s Value?
If you’re curious about how your home’s value compares to your tax assessment, feel free to reach out.
I’m always happy to send over recent neighborhood sales and market data so you can make an informed decision.
Vesta Schneider
Realtor
Lic# 811843
302-530-7314
[email protected]
