Point to Sale Tax States: Understanding the Basics

Point to sale states have to do with when property taxes are reassessed. If it's a point to sale state, the reassessment occurs on the sale instead of on a set schedule for all properties. Even though this reassessment occurs on the sale, sometimes it will take a full year to get an accurate tax assessment. Before the year, you'll have to underwrite based on an indication of what the taxes will likely be.

In non point to sale states, the property tax reassessment schedules are often between 4-8 years, but it can vary state to state. It's important to contact the tax assessor for the county and see when the next reassessment is scheduled. You'll likely have to underwrite for having a large tax increase in the reassessment year.

Differences:

Non-point to sale states will often have a large tax increase in year one after you purchase it. Point to sale states will likely have a similar increase in the property tax, but it will occur on the schedule sometimes years after acquisition.