Buyers of newly built homes can face a property tax surprise. Here’s why

Key Facts

WHY PROPERTY TAXES CAN JUMP FOR NEW BUILDS When lenders are qualifying someone for a home purchase, they factor in the principal, the interest payment on the mortgage, homeowner’s insurance and property taxes.
TRICKS TO GAUGE HOW PROPERTY TAX MAY CHANGE “People who buy today with the assumption that they qualify based on the current real estate taxes or current insurance need to really do more homework to understand where they could really be in a year,” Cohn said.
If you’re looking to buy in an area you’re unfamiliar with, find out how often the county reassesses property taxes and what the reassessment formula is based on, Cohn said.
If some newly built homes in your neighborhood with similar square footage have been around for a year, you could check the property address on a real estate site and get a ballpark estimate of what your taxes might be, said Veronica Fuentes, a certified financial planner at Northwestern Mutual.