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Updated over 5 years ago,
Property Taxes Increase after Purchase?
Hello BP community,
I have been receiving conflicting information on how to estimate the property taxes during my number analysis. My concern is if a property has significant appreciation since the last time is was assessed for property taxes, then when I purchase the property, a red flag pops up for the city since it was purchased at a higher price than last time then they reassess, and then the property taxes increase significantly. For example, a fourplex worth $200K in my area had a 2018 tax record of around $2,200 (not sure when it was reassessed, but it was purchased 10 years ago for around $110K). At a purchase price of $200K, using the mill rate for property tax calculation, the new property taxes would be around $3,400. I've had trusted professional sources tell me that after paying $200K for it, that the taxes will likely raise to around the $3,400 range. I've also had trusted professional sources tell me that the property taxes won't actually raise that much from the 2018 $2,200 range. Which side should I listen to? As you can guess, this large difference significantly impacts the property's monthly cash flow, and sometimes causes a good deal to fall into the not-so-good deal range when I use the more cautionary amount of $3,400. I don't want to be shooting myself in the foot estimating too high of property taxes and end up missing an actually good deal! Thank you for any input in advance!
-Lucas Duce