The tax bill prorated at your closing was the seller's bill. Your own bill arrives the following November, and it is calculated on a completely different number.
- The seller's bill is based on their capped assessed value and their exemptions. Neither transfers to you.
- Your property is reassessed at market value on the January 1 after closing, usually close to what you paid.
- You must apply for your own homestead exemption by March 1 to get the $50,000 exemption and start your own cap.
- Escrow accounts are set from the old bill, so expect a shortage notice in year two.
Two bills, two different numbers
At closing, property taxes are prorated using the most recent bill, which reflects the seller's assessed value after years under the Save Our Homes cap and the seller's exemptions. That bill is real, and the proration is correct, but it says almost nothing about what you will pay. On the January 1 after your purchase the property appraiser reassesses the home at market value, which in practice means a figure close to your purchase price. The cap starts over from there.
If the seller owned the home for fifteen years, their assessed value might be $300,000 on a home you paid $650,000 for. Their bill was calculated on $300,000 less exemptions. Yours will be calculated on roughly $650,000 less whatever exemptions you qualify for. At 18 mills that is the difference between about $4,500 and about $10,800 a year.
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The January 1 rule
Florida assesses every property as of January 1. If you close on March 15, 2026, the 2026 tax bill mailed that November is still based on the January 1, 2026 assessment, which reflects the seller's cap. The reset lands on the January 1, 2027 assessment and appears on the November 2027 bill. Close on December 20 and the reset arrives eleven months sooner.
That lag is why the shock usually comes in the second November, not the first, and why an escrow account set up at closing based on the old bill runs short. Servicers analyze escrow annually; expect a shortage letter and a higher monthly payment about eighteen months after closing.
Apply for your own exemption by March 1
Exemptions do not transfer either. The seller's homestead exemption disappears with the sale, and you must file your own with the county property appraiser by March 1 of the first year you own and occupy the home as your permanent residence. File in the first weeks of ownership rather than waiting; most counties accept applications online. The exemption removes $25,000 from taxable value for all levies and another $25,000 for non-school levies, and, more importantly, it starts your own Save Our Homes cap. The application details are in our homestead exemption guide.
If you are moving from another Florida homestead, file the portability application at the same time. It can transfer up to $500,000 of your previous cap benefit to the new home and materially lower that first reset. See homestead portability.
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How to estimate the real number before you close
Take the purchase price, subtract the exemptions you will actually qualify for, and multiply by the total millage for the property's taxing district. Then add the non-ad valorem assessments from the seller's bill, because those do not change with the sale. Our Florida property tax estimator does this for every county, and the county pages such as Palm Beach County property tax carry the current millage.
Lenders qualify you on the estimate they choose, and many use the seller's bill because it is the document in the file. If your debt-to-income ratio is tight, ask the lender to qualify you on the reset figure. It is better to learn the answer before contract than from a shortage letter.
Investors and second homes
If the home will not be your primary residence there is no homestead exemption and no 3% cap. The property falls under the separate 10% non-homestead cap, which resets on sale exactly the same way and does not apply to school taxes. Budget on full market value from the first reset. The details are in Florida's 10% cap for non-homestead property.
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Submit a Contract →Where this shows up at closing
The settlement statement will show a tax proration credit from seller to buyer for the portion of the year the seller owned the property, calculated on the old bill. That is correct and customary, and it is explained in who pays property taxes at a Florida closing. What the settlement statement will not show is next year's number. That is the one to budget.
Related Reading
Save Our Homes Explained: Florida's 3% Cap and Who Gets It
The 1992 amendment limits homestead assessment increases to 3% a year or inflation, whichever is lower.
Florida Homestead Exemption (2026): What It Is & How to File
Florida's homestead exemption cuts up to $50,000 off taxable value and caps increases at 3%.
Who Pays Property Taxes at Closing in Florida? Proration Math
Florida property taxes are paid in arrears, so the seller credits the buyer at closing.
Frequently Asked Questions
Why did my property taxes go up so much after I bought my house in Florida?
The property was reassessed at market value on the January 1 after your purchase, and the seller's Save Our Homes cap and exemptions ended with the sale. Your bill is calculated on roughly your purchase price.
When does the property tax reset happen after buying in Florida?
On the January 1 following the closing. The reset appears on the tax bill mailed the November after that January 1.
Does the seller's homestead exemption transfer to the buyer?
No. You must file your own homestead exemption application with the county property appraiser by March 1 of the first year you own and live in the home.
How do I estimate property taxes on a home I am buying in Florida?
Multiply the purchase price minus your exemptions by the total millage rate for the taxing district, then add the non-ad valorem assessments from the current bill. Our estimator does this by county.
Why did my mortgage payment go up in the second year?
Your escrow account was funded from the seller's old tax bill. After the reset, the servicer's annual analysis finds a shortage and raises the monthly escrow payment.
Do property taxes reset on a sale for rental property in Florida?
Yes. Non-homestead property is reassessed at market value after a change of ownership, then falls under the 10% annual cap for non-school taxes.