New Build

New Build

When a structure is under construction, that structure’s value is assessed as of the percentage completion of construction on January 1st of the Tax Year. Any structure on a property is considered an Improvement. The Total Improvement Market Value + Total Land Market Value = Total Market Value.

Escrow and Estimated Taxes

As reviewed in closing, the taxes are estimated by the mortgage company, based off an incomplete value of the property. This often leads to insufficient funds in the escrow account, causing the property owner to need to pay more at the end of the year to replenish the shortage. Often, the mortgage company will increase the monthly payment amount to prepare for an increase the following year and to pay back the shortage for the previous year.

BI and WSA

If there is a Builders Inventory or Waiver of Special Appraisal on the property, these exemptions will be taken off by the end of the Tax Year. For further information, visit the following link:

Waiver of Special Appraisal (WSA) and Builders Inventory (BI)

Homestead Exemption

If a newly built residential property is purchased after January 1, 2022, and qualifies for a Homestead Exemption, that Homestead Exemption can be prorated. In this case, the Homestead cap adjustment would apply after the first full tax year the Homestead Exemption was on the property.

“An owner who receives a prorated homestead exemption is considered to have qualified for the homestead exemption as of January 1st of the following year. Homestead cap adjustment will only apply after the exemption is on the property one full year. Tax Code Section 23.23(c-1)”

For example, if a property is purchased in 2022, 2023 would be the first full calendar year the Homestead Exemption was on the property, and 2024 would be the first year the property is eligible for the Homestead cap adjustment.

If the property is not 100% complete by Jan 1, the completion of the improvement will be considered “new value” and will not be included in the HS cap the following year.

Please see the following for further information on Exemption Requirements and the Homestead Cap:

Exemptions Information & Requirements

Homestead Cap

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