Buying a brand-new home is one of the most exciting milestones in life. But let’s be honest; while choosing finishes and imagining your move-in day is thrilling, navigating the financial side of things can feel overwhelming in today’s market. And for many buyers, one of the biggest head-scratchers is understanding how property tax for new construction homes works.

Unlike a resale home with a long tax history, a new build typically has no past property tax data to reference. Many homeowners see an unexpected jump in taxes after their first year, once their newly built home is reassessed at full value, according to CNBC.

But at NHC, we take the guesswork out of the process. From transparent pricing to smart tools that help you anticipate costs upfront, we make it easier to understand your potential property taxes for new construction, so you can focus more on the excitement of moving in and less on surprise expenses.

How Are Property Taxes Calculated?

To estimate your taxes, it helps to understand how they’re determined. Property taxes are based on two key elements:

1. Assessed value: The value of your land and home as determined by your county or city
2. Local tax rate: Also known as a millage rate, this is set by your municipality 

So if your completed home is valued at $300,000 and your local tax rate is 1.25%, your annual tax bill would be:

$300,000 × 0.0125 = $3,750

Don’t worry if this feels unfamiliar. When you build with NHC, our team walks you through every number, including your estimated property tax for a new construction home, so you always know what to expect.

What Are Unimproved Taxes? 

Before your home is complete, your land is usually considered unimproved, meaning there are no structures built yet. At this stage, you’ll likely only pay taxes on the lot itself, not the future home. That typically results in a lower first-year tax bill, which is a major win for budget-conscious buyers.

At NHC, our streamlined build process, combined with below-market pricing, gives buyers a head start on affordability, including a lower initial tax burden based on unimproved taxes compared to other builders.

Improved vs Unimproved Land: Why It Matters

The key distinction here is whether the property has been developed. Unimproved land has no buildings or utilities, meaning it’s taxed at a lower rate. 

Improved land, on the other hand, includes your newly built home, driveway, landscaping, and any other upgrades. That full value will be reassessed once the home is complete. And since NHC homes are the most affordable around, your property taxes will automatically be lower than your friends who decided to keep renting.

When Do You Start Paying Property Taxes on New Construction?

Your first-year tax bill depends heavily on when your home is completed. If construction wraps up late in the year, your property tax for new construction may be lower for a short time, then adjust once your county performs a reassessment.

Let’s say your lot was valued at $80,000, and you paid $960 in taxes. Once your home is added and the total value is $400,000, the tax jumps to $4,800. 

Our NHC team can help estimate these shifts using your county tax guidelines. We also recommend budgeting tools like our mortgage calculators, so you can plan with confidence.

Are Property Taxes Higher For New Builds?

Property taxes for new construction can sometimes be higher than expected simply because the home is brand new, built to current code, and often comes with modern features that raise its overall value. New builds are typically assessed at their full market value once completed, which can lead to a noticeable increase from the land-only tax bill you may initially receive.

That said, higher taxes don’t necessarily mean unaffordable taxes, especially when you’re buying with NHC. Since our homes are priced with affordability in mind, your starting point is already more budget-friendly than many resale homes. And when you factor in energy efficiency, fewer repairs, and the predictability of a brand-new structure, those slightly higher property taxes may still fit well within your monthly budget.

How NHC Simplifies Property Tax For New Construction

Understanding property tax for new construction homes is one of the smartest ways to prepare for homeownership. And when you build with NHC? You get the numbers, the support, and the affordability you deserve. That’s why NHC supports you from day one with:

• Affordable move-in ready homes: Our homes start in the $160s with only $1000 down required. 
• Transparent pricing: No inflated markups, no surprises. 
• Flexible financing: We offer rates as low as 5.99% when you choose NHC Mortgage as your financing provider.

Let’s get you one step closer to home. Contact us today to start your home-buying journey!