MultiFamily Property Taxes

[Jung Won Kim]

Is the property tax based on purchase price? For instance, if property tax is 1% and an apartment sells for $10MM, would the tax be $100K per year? I'm asking this because hypothetically, if the previous owner purchased the same apartment for $5MM years ago and in the offering memo it shows tax as ~$500-600K, and I purchase it for $10MM, would the property tax increase nearly 2-fold just because I accepted a higher price than what previous owner bought at?

[Omar Khan]

Originally posted by @Jung Won Kim:

Is the property tax based on purchase price? For instance, if property tax is 1% and an apartment sells for $10MM, would the tax be $100K per year?

I'm asking this because hypothetically, if the previous owner purchased the same apartment for $5MM years ago and in the offering memo it shows tax as ~$500-600K, and I purchase it for $10MM, would the property tax increase nearly 2-fold just because I accepted a higher price than what previous owner bought at?

Depends on the jurisdiction. 

TX = non-disclosure state i.e. assessor makes a "independent" assumption of the fair value of the property and assess taxes on it (in theory). This is adjusted for growth to avoid existing owners getting massively higher tax bills YoY (again, in theory)

FL = disclosure state i.e. tax % * price you paid

Some other states = limit growth by a certain %

Best bet: consult the local tax assessor's office and/or your broker.