A buyer purchases a property; what will happen to the taxes due to the Saved Our Homes Act?

A buyer purchases a property; what will happen to the taxes due to the Saved Our Homes Act?

• A. Taxes will be lower because limits were expanded
• B. Taxes will be higher because limitations were removed
• C. Taxes stay the same
• D. Taxes are eliminated for the first year

Answer: (B)

The idea being tested is how the Save Our Homes rule interacts with a change of ownership. Save Our Homes limits annual increases in the assessed value for a homestead, protecting the current owner from big tax jumps. But when a property is sold, that limitation does not carry over to the new owner. The property is reassessed at current market value for the new owner, and taxes are calculated from that value. So, after a purchase, the new owner’s taxes are typically higher because the cap is no longer in effect for them. That’s why the best answer is that taxes will be higher due to the limitations not applying to the new owner.

The idea being tested is how the Save Our Homes rule interacts with a change of ownership. Save Our Homes limits annual increases in the assessed value for a homestead, protecting the current owner from big tax jumps. But when a property is sold, that limitation does not carry over to the new owner. The property is reassessed at current market value for the new owner, and taxes are calculated from that value. So, after a purchase, the new owner’s taxes are typically higher because the cap is no longer in effect for them. That’s why the best answer is that taxes will be higher due to the limitations not applying to the new owner.