Palm Beach County Property Taxes: What Buyers Need to Know

Understanding property taxes is crucial when buying a home in Palm Beach County, as taxes can increase significantly after a sale and vary based on the property’s location. This guide explains how taxes are reassessed upon property transfers, when those changes take effect, and how tax rates differ between properties inside and outside city limits.

How Property Taxes Are Assessed When a Property Transfers Ownership

When a property is sold, the Palm Beach County Property Appraiser resets its assessed value to just (market) value, which is typically close to the purchase price. The new owner’s taxable value is then determined based on Florida’s property tax rules.

1. When Does the Reassessment Happen?

• The Palm Beach County Property Appraiser reassesses all properties as of January 1st each year.
• If a property sells in 2024, the taxable value will not change immediately. Instead, it will be reassessed on January 1, 2025, and the updated tax bill reflecting the new assessment will be issued in November 2025.

Example Timeline

• A home sells in May 2024.
  • The 2024 tax bill remains based on the prior owner’s assessed value (which may be lower if they had a Homestead Exemption).
  • In January 2025, the county reassesses the home based on the 2024 sale price.
  • The new, higher taxable value appears on the November 2025 tax bill.

2. Why Can Property Taxes Increase After a Sale?

The primary reason taxes often rise significantly after a sale is the loss of the previous owner's tax caps and exemptions.

Homestead-Exempt Properties

• Florida’s Save Our Homes (SOH) cap limits the annual increase of a homesteaded property’s taxable value to 3% or the Consumer Price Index (CPI), whichever is lower.
• When ownership changes, the new owner loses the previous owner’s SOH cap, and the property is reassessed at just value (market value).
• If the new owner applies for a Homestead Exemption, the SOH cap starts fresh, limiting taxable value increases to 3% annually going forward.

Non-Homestead Properties

• Non-homesteaded properties (e.g., second homes, rentals) are subject to a 10% cap on annual increases in assessed value but do not receive SOH protection.

How Property Taxes Are Calculated

Property taxes are based on the property’s taxable value and the local millage rate (tax per $1,000 of taxable value). 

Property Tax Calculation Formula:

Taxable Value×Millage Rate=Annual Property Taxes\text{Taxable Value} \times \text{Millage Rate} = \text{Annual Property Taxes}

The millage rate varies depending on the property's location and whether it is inside city limits or in unincorporated Palm Beach County.

Taxes Inside vs. Outside City Limits in Palm Beach County

A significant factor influencing property taxes is whether the home is located inside a city’s limits or in unincorporated Palm Beach County.

1. Taxes for Properties Inside City Limits

Properties within city limits pay:

• County taxes (including schools, county services, etc.)
• City taxes (for municipal services like police, fire, parks, and road maintenance)
• Special district taxes (for fire rescue, water control, etc.)

Since city properties are subject to both county and city millage rates, total property taxes are usually higher than in unincorporated areas.

2. Taxes for Properties in Unincorporated Palm Beach County

Properties outside city limits pay:

• County taxes (which cover county-wide services and schools)
• Unincorporated services tax (for sheriff’s services, fire rescue, road maintenance, etc.)
• Special district taxes if applicable

These properties do not pay city taxes, making their overall tax bill lower than similar properties within a city. However, they receive services from county departments rather than city agencies (e.g., law enforcement is provided by the Palm Beach County Sheriff’s Office (PBSO) rather than a city police department).

Example Property Tax Comparison

Let's compare two properties with a taxable value of $500,000:

Inside Boca Raton City Limits

• County Millage Rate: 4.5 mills
• City Millage Rate: 3.7 mills
• School Board Millage: 6.9 mills
• Special Districts: 1.5 mills
• Total Millage Rate: 16.6 mills

Tax Calculation:

500,000×(16.6/1,000)=8,300500,000 \times (16.6 / 1,000) = 8,300

Total Taxes: $8,300 per year

Unincorporated Palm Beach County (Outside Boca Raton City Limits)

• County Millage Rate: 4.5 mills
• No City Millage
• School Board Millage: 6.9 mills
• Special Districts: 1.5 mills
• Total Millage Rate: 12.9 mills

Tax Calculation:

500,000×(12.9/1,000)=6,450500,000 \times (12.9 / 1,000) = 6,450

Total Taxes: $6,450 per year

Key Takeaways

• Properties inside city limits pay higher taxes due to city millage rates.
• Properties in unincorporated Palm Beach County pay only county-wide taxes, resulting in a lower overall tax bill.
• Services differ—county properties rely on PBSO and Palm Beach County Fire Rescue rather than city departments.

Final Thoughts: What Buyers Should Know

When purchasing a home in Palm Beach County, buyers should:

1. Estimate future property taxes, as reassessments after a sale can cause a significant tax increase.
2. Determine if the property is inside a city or in unincorporated Palm Beach County, as this affects tax rates.
3. Apply for a Homestead Exemption if eligible, to benefit from Florida’s Save Our Homes (SOH) cap and reduce future tax increases.

Before making an offer, consulting a real estate professional or tax specialist can help you better understand your potential tax burden and savings opportunities.

Contact Information

Tags

• palm beach county (20)
• home buyers (12)
• homebuyers (7)
• first time home buyers (5)
• homestead exemption (2)
• property taxes (2)
• buying (1)
• south florida property taxes (1)
• real estate taxes (1)
• tax exemptions (1)