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Understanding Property Taxes on New Build Homes in the 417

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4 minutes

When purchasing a new build home in Missouri, especially in the 417 area, understanding property taxes is a key part of your financial planning.

Property taxes are essential to maintaining local services such as schools, roads, and emergency services, but the process can be slightly different when you’re dealing with a new construction home.

In this article, we’ll break down how property taxes work on new build homes in Missouri, what you can expect in the Springfield metro area, and how to plan for them.

How Property Taxes Are Assessed on New Build Homes

In Missouri, property taxes are calculated based on the assessed value of the property, which includes both the land and the structure on it. For new build homes, the assessment process can be a bit different compared to buying an existing home:

  1. Initial Tax Assessment Based on Lot Value: At closing, your prorated property taxes are typically based on the lot’s value only since county appraisers may not have assessed the home’s full value by that time. Once the county updates the assessment to include the completed home, your property taxes will adjust accordingly.
  2. Reassessment After Completion: Once the home is completed, the property will be reassessed to include the value of the home. This can result in a significant increase in property taxes from the land-only assessment.
  3. Prorated Taxes: If your home is completed mid-year, your taxes may be prorated based on when the home was finished and ready for occupancy.

What to Expect in the 417 Area

The 417 area, which includes the cities of Springfield, Battlefield, Ozark, Nixa, and Rogersville, has competitive property tax rates compared to other parts of Missouri. Here are some key things to keep in mind:

  • Rates Vary by County and City: Property tax rates can vary depending on whether your new build is located in Greene, Christian, or Webster County. Additionally, city taxes in Springfield may differ from those in smaller communities like Ozark or Rogersville.
  • School Districts Matter: A significant portion of property taxes goes toward funding local schools, which can influence the rate depending on the district your home is in.
  • Special Assessments: Some neighborhoods in new developments may have special assessments for infrastructure improvements, such as roads or utilities, which can impact your overall tax bill.

How to Estimate Property Taxes on a New Build Home

To estimate your property taxes, you can use this simple formula:

(Assessed Value of Home) x (Local Tax Rate) = Property Taxes Owed

Key Terms to Know:

  • Assessed Value: In Missouri, this is typically 19% of the home’s market value for residential properties.
  • Local Tax Rate: Tax rates are expressed as dollars per $100 of assessed value. For example, if your local rate is $6.50, you’ll pay $6.50 for every $100 of assessed value.

Common Questions About Property Taxes on New Build Homes

1. Will My Taxes Change Over Time?

Yes, property taxes can fluctuate based on changes in the assessed value of your home or adjustments to local tax rates. Reassessments typically occur every two years in Missouri.

2. Are Property Taxes Included in My Mortgage Payment?

If you finance your home with a mortgage, your lender will likely include property taxes in your monthly payment and place the funds in an escrow account to ensure timely payment.

3. What Happens If I Build in a Development?

New developments often come with additional assessments to cover infrastructure costs, such as roads, sidewalks, or utilities. These are typically included in your overall property tax bill.

Ways to Plan for Property Taxes on a New Build

To avoid surprises, it’s essential to plan for property taxes when buying a new build home. Here are some tips:

  • Ask Your Builder: Builders like Bussell Building can help provide an estimate of property taxes based on similar homes in the area.
  • Research Local Tax Rates: Check the rates for your specific county and school district to get a more accurate estimate.
  • Budget for Increases: Remember that your taxes will likely increase once the home is reassessed after construction is complete.
  • Utilize Missouri’s Homestead Exemption: If you qualify, Missouri offers a property tax credit for seniors and certain disabled homeowners, which can help reduce your tax burden.

Advantages of Understanding Property Taxes Before You Build

Being informed about property taxes on new build homes has several advantages:

  • Accurate Budgeting: Knowing your estimated tax liability helps you plan your finances and avoid surprises after moving in.
  • Better Location Decisions: Understanding how taxes vary between neighborhoods or school districts can help you choose a location that fits your budget.
  • Long-Term Financial Planning: Property taxes are an ongoing cost, so having a clear picture of what to expect allows you to plan for the future.

Why Choose a Bussell Home?

At Bussell Building, we’re here to make every step of the home-buying process seamless, including helping you understand property taxes. Our homes are designed with affordability and quality in mind, making it easier for you to enjoy your investment without unnecessary stress. Explore our available homes and neighborhoods today! Whether you’re looking for a move-in-ready home or planning to build in one of our communities like Fall Creek in Rogersville or Valley Ridge in Ozark, our team is here to guide you through the process.