Inheriting a Low Property Tax Bill Is Getting Much More Complicated

When Willa Staats and her brother inherited their father’s home and adjacent lot in East Austin, TX, they expected to build their lives there.But one year later, they were hit with a combined property tax bill of $48,000—nearly 90% more than their father had last paid.Their experience points to a growing fault line in the Great Wealth Transfer: Older Americans are expected to pass down trillions of dollars in housing wealth in the coming decades, but the property tax protections that helped make those homes affordable aren't always handed down with them.And when those protections fall away, heirs can suddenly be exposed to years of accumulated appreciation all at once.Where inheriting a home can come with a bigger tax billIn most states, inheriting a home may trigger the loss of exemptions tied specifically to the previous owner (like as a senior freeze or circuit breaker) but the property is not automatically reassessed at its current market value simply because its owner died.A smaller group of states operates differently, though.In California, Florida, Maryland, Michigan, New Mexico, South Carolina, and Texas, a transfer can cause a home to lose some or all of the assessment pro...