Quick Summary
- Yes — in most cases, real estate taxes and property taxes refer to the same thing: ad valorem taxes assessed on real property (land and structures).
- In Florida, these taxes are calculated annually based on assessed value and local millage rates.
- Understanding how real estate taxes work is critical during closing because they are prorated between buyer and seller.
Introduction: Why This Question Matters in Florida Real Estate
If you’ve ever reviewed a closing disclosure or property listing and wondered whether “real estate taxes” are different from “property taxes,” you’re not alone. The terms are often used interchangeably, but confusion can arise — especially for first-time buyers or those relocating to Florida from other states.
In markets like Naples, Bonita Springs, and Fort Myers, where many buyers are moving from the Northeast or Midwest, understanding Florida’s tax structure is essential. Let’s clarify the terminology and explore how these taxes affect your purchase and closing.
Are Real Estate Taxes and Property Taxes the Same Thing?
In most situations, yes — real estate taxes and property taxes refer to the same tax on real property.
Both terms describe taxes assessed by local governments on:
- Land
- Residential homes
- Condominiums
- Commercial buildings
- Investment properties
In Florida, this tax is officially referred to as ad valorem property tax, meaning it is based on the assessed value of the property.
However, there is a subtle nuance worth understanding.
The Technical Distinction: Real Property vs. Personal Property
Legally speaking, “property tax” can refer to two types of taxable assets:
- Real Property – Land and anything permanently attached to it (homes, buildings, improvements).
- Tangible Personal Property (TPP) – Business equipment, machinery, furniture used in commercial operations.
When most homeowners say “property taxes,” they are referring to real estate taxes on their home. In residential real estate transactions, the terms are effectively identical.
For businesses, however, property taxes could also include tangible personal property taxes. For the average homebuyer in Southwest Florida, this distinction typically does not apply.
How Real Estate Taxes Work in Florida
Florida property taxes are calculated annually based on three primary components:
1. Assessed Value
Each year, the county property appraiser determines the assessed value of your home. This may differ from market value and is subject to Florida’s Save Our Homes cap for homesteaded properties.
2. Millage Rate
Local taxing authorities — including counties, cities, school boards, and special districts — establish millage rates. One mill equals $1 of tax per $1,000 of assessed value.
3. Exemptions
Florida offers several exemptions, including:
- Homestead exemption
- Senior exemptions
- Veteran exemptions
- Widow/widower exemptions
These exemptions reduce taxable value and lower your annual bill.
In Collier and Lee Counties, millage rates and exemption structures can vary slightly, which is why reviewing the specific property’s tax history is important during a transaction.
Why This Matters at Closing
One of the most important moments real estate taxes appear in a transaction is during closing.
Property taxes in Florida are paid in arrears, meaning you pay for the prior year. During closing, taxes are prorated between buyer and seller based on the number of days each party owns the property during the tax year.
For example, if a property in Naples closes in July, the seller is responsible for taxes from January through the closing date. The buyer assumes responsibility from the closing date through December 31.
The settlement statement reflects this proration so both parties pay their fair share.
Why Buyers Often See Large Escrow Amounts
If you’re financing your purchase, your lender will likely establish an escrow account. That account collects a portion of your annual real estate taxes each month.
In addition to prepaid interest and homeowners insurance, buyers may see:
- Several months of property tax reserves
- Prorated tax credits or debits
- Estimated future tax adjustments
For buyers relocating from states like New York or Massachusetts, Florida’s structure may feel different, especially since there is no state income tax. That makes property taxes one of the primary local funding mechanisms.
How Property Taxes Change After Purchase
This is an important point many buyers overlook.
When you purchase a home, the assessed value may reset closer to market value. That means the prior owner’s tax bill may not reflect what you’ll pay after closing.
For example:
- A seller may have owned the property for 15 years with a capped assessed value.
- After transfer, the Save Our Homes cap resets.
- The new owner’s taxable value may increase.
This is why it’s critical to estimate post-closing taxes accurately rather than relying solely on the previous owner’s bill.
Are Real Estate Taxes Higher in Naples, Bonita Springs, or Fort Myers?
Tax rates vary by municipality and county.
Naples properties fall within Collier County.
Fort Myers and Bonita Springs are within Lee County.
Differences in millage rates, special districts, or Community Development District (CDD) assessments can affect total tax bills.
Two homes of similar value in neighboring communities can have noticeably different annual tax obligations due to:
- School district rates
- City vs. unincorporated areas
- CDD bond repayments
- Special assessments
Understanding these differences before closing prevents surprises.
What About Non-Ad Valorem Assessments?
Your annual tax bill may also include non-ad valorem assessments, which are not based on property value. These can include:
- Solid waste collection
- Stormwater fees
- Lighting districts
- Special improvement assessments
While not technically “real estate taxes” in the strictest sense, they appear on the same tax bill and affect total ownership cost.
Why This Topic Is Important for Real Estate Agents
Agents who understand property tax structure provide tremendous value to their clients.
Buyers frequently ask:
- “Will my taxes go up after I buy?”
- “Why is my escrow payment higher than expected?”
- “What’s the difference between assessed and market value?”
Being able to clearly explain that real estate taxes and property taxes are essentially the same — while also clarifying exemptions and reassessment — builds trust and credibility.
The Role of Title Companies in Tax Clarity
While county property appraisers determine tax amounts, title companies play an important role in ensuring accuracy at closing.
During the transaction, the title company:
- Verifies current tax status
- Confirms unpaid taxes
- Calculates prorations
- Ensures all outstanding taxes are addressed
Clear tax handling prevents post-closing disputes and ensures a clean transfer of ownership.
Key Takeaways
In residential transactions, real estate taxes and property taxes generally mean the same thing — taxes assessed on land and improvements.
However, understanding how they are calculated, prorated, and potentially reassessed after closing is critical for both buyers and sellers in Southwest Florida.
Florida’s tax structure offers advantages, particularly with no state income tax, but it requires clarity around millage rates, exemptions, and post-sale adjustments.
Final Thoughts
If you’re buying or selling in Naples, Bonita Springs, or Fort Myers, understanding property taxes isn’t just about terminology — it’s about total cost of ownership.
Clear knowledge leads to smoother closings, better budgeting, and fewer surprises. And in real estate, predictability is one of the most valuable assets of all.