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If you’ve recently purchased a newly constructed home, there’s an important financial consideration you may not be aware of: the Supplemental Tax Bill. This is an additional tax that is separate from your regular annual property taxes.

The Supplemental Tax Bill represents the difference between what your land was previously assessed at and its new assessed value after the improvements have been made – namely, your new home. This change in value can result in a sizable bill, often running into the thousands. In fact, depending on the price of your home, it could be as high as $12,000 or more!

Some lenders will take this into account when structuring your mortgage payments, but many do not. This means there’s a good chance you’ll be responsible for covering this additional expense out-of-pocket, typically in two separate installments.

It’s essential to be aware of this tax bill to avoid any surprises down the road. Keep an eye out for it after you close on your new home!