Tax assessors and real estate taxes work differently in every state. In my state we pay our taxes in arrears. That means in 2014 I pay my taxes for charges and assessments from 2013. It sounds like that is what happens in your state also. All re-assessments must be completed by the end of March here on a yearly basis. New construction is assessed when it is completed or soon after. Only your tax assessor can tell you when it would be assessed. Your builder and banker are probably correct, but I would make a call to confirm this.

Thirdfrt, Just for your information, The basic inheritance, is the cost mom paid for it and the money you received for the house, the difference is technically your capital gain, minus all fees to sell it. Ex- mom paid 5,000.00 you sold for 100,000 and had 6,000 in fees to sell the home. Technically, you made 89,000.00 on the property. I would consult a tax professional for read up online at the irs website on inheritance and capital gain. I don't think you would pay any capital gain on the house only because it was an inheritance and depending on the amount of money, which is small, you probably don't have any tax on it. You can't claim a loss on a situation where you can't prove you actually lost money by selling the property, which you didn't, because you didn't pay for the property and it has accumulated some value since your mom bought it.

jillinnj that's a great link. It points out a factor that I think we keep missing here with our comparisons and justifiable rants. The tax on a property is relative to the income of the owner. The house highlighted in the original post has high property tax, but if the owner income is proportionate the taxes are not a burden. My original question was what do you pay as a *proportion* of income because I think that's a more realistic indicator of impact on lifestyle. I'm wondering if people in NJ, for example, are more likely to be house poor because of the ratio of income to tax or if the people in TN are living a relatively easier life with more *proportionately* discretionary income. Everything is relative. My DH could not earn the same income he currently does in a small town in TN but an equal house in terms of size and amenities would probably cost significantly less and be taxed far less. It *could* have a significant impact on lifestyle. Quality of life is a very subjective qualifier - I might hate small town life in TN or I might hate city life in NJ but I don't know of another way to get the same sense of what it costs to live where. Certainly there will always be very high incomes in low cost of living areas but not likely to be the norm. But in some places a property owner really has to be in a high income bracket nationally just to be able to afford housing. It's not easy to make this an apples to apples comparison.

Definitely give your tax accountant a call. You have many more issues than this to discuss with him/her. You need to have everything set up as efficiently and properly as possible so that at the end of the tax year, you hand him/her a workable stack of information. Your tax accountant isn't just there from Feb-April--he's there all year. I give mine a call anytime I have a question that pertains to what's going to be happening to my taxes. He's happy to offer advice, many times he doesn't even charge me. AND by asking ahead of time, you often have the option of setting things up in the most favorable way for you. There are legal ways to reduce your tax liability, but you need to be getting good advice, so you don't make costly mistakes. Please call your tax accountant a call--this is what they do. And if you don't have one--with going into this investment, now's the time to get one.