Property Tax Basics for
Building Your First House

home selling articles and tips


One of the most commonly overlooked expenses of building a home is the property tax. These taxes can easily amount to thousands of dollars a year, and that can result in major financial problems for new homeowners. Everyone considering building a home should know how the taxes are assessed in their state and what they can do to keep them as low as possible. 

Calculating Property Tax

Determining property tax on a new or custom home is no easy task. What many homeowners do not realize is that the total construction costs are not necessarily the numbers that will be used to determine the value of the home. Depending on your county’s exact tax laws, you will most likely need to have an assessor brought out to determine your home's value and your property tax.

What is Assessed?

The actual assessment process varies quite a bit between every state and county. As a general rule, the assessor will look at the value of the land, the home itself, and nearby pieces of property. They will then take a closer look at any upgrades or additions that have been made to the home. Once the final value has been totaled, that number will be multiplied by the current tax rate. 

The Appeals Process

Most homeowners will be glad to hear that they can appeal the tax if they feel their property was unfairly assessed, but this process typically requires an experienced lawyer. With very little oversight, many counties attempt to get as much as they can out of local homeowners, and it is absolutely vital to have a legal representative who can help you protect your finances and the home you have worked so hard to build. You can register for a free LivePlan event with certain lawyers as well. This can help you if you are caring for an older property that has been passed through generations.

Keeping Your Property Tax Low

The easiest way to lower your property taxes is to see if you qualify for any exemptions. Many states and counties offer exemptions to veterans, disabled residents, and those who work in specific industries. Much like the appeals process, this is another situation in which you should have an experienced agent or lawyer by your side to explore your options. 

Property tax can be an especially complicated issue which is why it is so important to understand the nuances well before you break ground. Those who do not plan ahead could find themselves spending tens of thousands of dollars over the years in extra taxes they were not expecting.