Your first Florida property tax bill can arrive looking nothing like the number you saw at closing. The taxable value is different, the exemption is gone, and the escrow portion of your payment no longer covers the bill. That is usually not a billing error. It is how reassessment, homestead exemptions, and tax proration interact when a property changes hands in Florida.

Here is what is actually happening, and how to plan for it before you close.

The short version

Florida property taxes are paid in arrears. The bill you get in November covers the year that is almost over.
At closing, the seller credits you for the part of the year they owned the property. That credit is usually based on the seller’s tax bill, not yours.
The seller’s bill often reflects a capped assessed value and a homestead exemption that do not transfer to you.
The county reassesses as of January 1 after the sale. That is when the taxable value can jump.
If your taxes are escrowed, the increase reaches you as a higher monthly payment and possibly a shortage, not as a bill in the mailbox.

Florida taxes are paid in arrears

The Florida tax year runs January 1 through December 31, but the bill for that year does not arrive until November. In Palm Beach County, bills open for collection on November 1 and are due by March 31 of the following year. Paying early earns a discount: 4 percent in November, 3 percent in December, 2 percent in January, and 1 percent in February.

That timing causes most of the confusion. If you close in June, six months of the current tax year have already passed, and nobody has paid a dollar of it yet.

What proration at closing really does

Proration is a settlement adjustment, not a tax payment. Because the seller occupied the property for part of the year without paying that year’s tax, the seller credits you for their share of the year at closing. The day of closing is normally charged to the buyer.

The credit is almost always an estimate. Under the FAR-BAR AS IS Residential Contract for Sale and Purchase, taxes are prorated based on the current year’s tax, and if the current bill is not yet available, the prior year’s bill is used. The proration section of that contract, Standard K, also gives either party the right to request a readjustment when the actual bill comes out, and that right survives closing.

Two details are worth knowing:

Proration is normally figured on the seller’s tax amount, which may be far below what the property will be taxed at for you.
Non-ad valorem assessments on the bill, such as solid waste or fire assessments, run on a fiscal year and are often paid in advance. Those are usually credited to the seller instead of you, because you are the one who will use the service for the rest of that fiscal year.

Why the seller’s tax number does not carry over

Two separate protections keep a long-time Florida homeowner’s tax bill low, and neither one follows the deed.

1. The Save Our Homes cap

Homestead property is assessed at just value when the owner qualifies. After that, the assessed value can rise no more than 3 percent a year, or the change in the Consumer Price Index, whichever is lower. In a market that has appreciated faster than 3 percent a year, the seller’s assessed value can sit well below what the home is actually worth.

Florida Statute 193.155(3)(a) resets that. After a change of ownership, the property is assessed at just value as of January 1 of the year following the sale, and the cap starts over from there. The seller can port the accumulated Save Our Homes benefit to a new Florida homestead, but it cannot be handed to the buyer.

2. The homestead exemption

The homestead exemption is tied to a person, not a property. A qualifying owner can exempt up to $50,000 of assessed value, with part of that amount applying only to non-school taxes. When the property sells, that exemption comes off the roll. You can qualify for your own, but only if you owned the property and used it as your primary residence on January 1 of that tax year, and you apply by March 1.

Put those two rules together and the math becomes easy to see. A seller might have been taxed on a capped assessed value of $240,000 with a $50,000 exemption, which is $190,000 of taxable value. A buyer who pays $650,000 can end up taxed on a taxable value several times larger, even after filing for their own exemption.

When the increase actually shows up

This is where buyers get surprised in the wrong year. The change follows the assessment date, not your closing date.

The bill for the year you bought. This one usually still reflects the seller’s ownership on January 1, including their exemption. The proration credit you received at closing was calculated on that same basis, so this bill often looks close to what you expected.
The bill for the following year. This is the one built on the January 1 reassessment after the sale. This is where taxable value jumps, even if you filed for homestead on time.
The escrow analysis after that. This is where your monthly payment catches up, often with a shortage spread over future payments.

New construction adds another layer. The first bill on a newly built home can reflect land value or partial completion, and the following bill reflects the finished structure.

Why your escrow account runs short

If your loan has an escrow account, your lender collects a monthly amount for taxes and insurance and pays the bill for you. At closing, that number is an estimate, and it is often based on the current tax bill, which is the seller’s bill.

When the real bill comes in higher, the servicer runs an escrow analysis. Federal rules under Regulation X, 12 CFR 1024.17, cap the cushion a servicer can hold at one sixth of the estimated annual disbursements. If the account is short, the servicer can require repayment. For a shortage equal to one month’s escrow payment or more, repayment can be spread over at least twelve months, and it cannot be demanded as a lump sum.

The practical result: principal and interest do not change on a fixed-rate loan, but your total payment can climb twice, once for the higher tax amount and once for the shortage repayment.

Some loan programs allow escrow to be waived at a certain loan-to-value, which puts the tax bill back in your hands directly. That depends on the program, the lender, and the pricing, so ask before assuming it is available.

What to check before you close

Ask for a tax estimate at your purchase price. Not the seller’s bill. Your closing agent or loan officer can run the math on the purchase price with no seller exemption applied.
Ask how proration was calculated. Confirm whether the current year’s bill or the prior year’s bill was used, and who receives the credit for non-ad valorem assessments.
Budget for the second-year payment. If the seller owned the home for a decade, assume a meaningful increase and leave room in your monthly budget.
Watch for the TRIM notice. Palm Beach County mails its Notice of Proposed Property Taxes in August. Check the assessed value, the exemptions listed, and the proposed millage rates. The notice also states the deadline to file a value petition with the Value Adjustment Board, and that window is short.
Update your mailing address. Tax bills go to the address on file with the Property Appraiser, so a bill can still be addressed to the seller for a while.
File for homestead by March 1. If you owned and occupied the home on January 1, apply with the Palm Beach County Property Appraiser. Missing the deadline costs you a full year of exemption.

Amendment 3 is on the ballot, not in the law

Florida voters are deciding Amendment 3 on the November 3, 2026 ballot, and it needs 60 percent approval to pass. As written, it would raise the homestead exemption for non-school taxes to $150,000 in 2027 and $250,000 in 2028, with inflation adjustments after that, while school taxes keep the current $25,000 exemption. It would also lower the annual assessment cap on non-homestead property from 10 percent to 5 percent, and phase in the increased exemption for people who are not Florida residents by December 31, 2026.

Three things are worth keeping straight. It is a proposal until the votes are counted. It would not change a bill you have already received. And it would not restore a seller’s capped assessed value, because reassessment after a sale is a separate rule that the amendment does not touch.

FAQs

Will my property taxes be the same as the seller’s?

Usually not. The seller’s bill likely reflects a capped assessed value and a homestead exemption that end with the sale. Your taxable value is set by a new assessment as of January 1 after the sale.

Can I take over the seller’s homestead exemption?

No. The exemption belongs to the person who qualified for it. You can qualify for your own if you own and occupy the home on January 1 and apply by March 1.

Who pays the property tax bill for the year I bought the home?

You pay the bill when it comes due. The seller credits you at closing for the part of the year they owned the property, and either party can request a readjustment once the actual bill is issued.

My rate is fixed. Why did my payment go up?

Because of escrow. The tax and insurance portions of your payment are recalculated when the actual bills arrive, and any shortage is collected on top of the new monthly amount.

Does the county reassess every year?

Yes. Values are set as of January 1 each year. For homestead property, the 3 percent cap limits how much the assessed value can rise after the first year.

Plan the payment, not just the price

The purchase price tells you what the loan will be. The tax bill tells you what the payment will feel like two years from now. If you are buying in Boca Raton or anywhere in Palm Beach County, we can run the numbers with a realistic tax estimate before you make an offer.

Use our mortgage calculator for a quick payment check, review current mortgage rates, or start a pre-approval. For more on the exemption side, read Florida homestead exemption and portability in 2026.

This article is general information, not tax or legal advice. Tax rules and county procedures can change, and your situation may involve details this article does not cover. Confirm specifics with the Palm Beach County Property Appraiser, the Palm Beach County Tax Collector, or a qualified tax professional.