Region Appraisals Blog

If you are a real estate owner in Florida, you'll notice that in November of every year, the County sends you a new Tax Bill of how much you must pay in ad valorem and non-ad valorem taxes for the coming year.

Per Florida Statures, an assessed value IS estimated each year for every parcel and tangible property. Therefore, the Property Appraiser's Office uses a Computer Assisted Mass Appraisal (CAMA) system to reach a Just (Market) Value for each parcel. The Just Value is based on "qualified" sales from one year in arrears. For example, the sales for the 2010 tax year would date from January 2, 2009 to January 1, 2010. Generally, the sales of the last quarter are given higher consideration. The sales data allows the Property Appraisers to select the best "qualified" sales from the nearest and most similar neighborhoods, in order to have a close comparison to your property. Today, the Appraisers are allowed to use short sales and foreclosure sales as long as the property was listed in the MLS and it was considered in "normal/good" condition while listed, and the sale was recorded as an arm's-length transaction. Certain types of property may not sell that often, therefore other information might be used to estimate an assessed value such as income/expense information or the cost-approach (replacement construction cost to build) might be employed to determine value.

The taxes authorities are considered Hospital District, School Board District, Water Management District, City Commission, County Commission, etc.) The tax rates are set by these taxing authorities based on their needs, in the jurisdiction where your property is located. In addition to the assessed value, the tax rate is used to calculate your property ad valorem taxes for the year. The formula (Taxable Value x Tax Millage Rates + Special Assessments = Tax Bill) for how much you pay is to multiply the tax rate (dollars per thousands) by the assessed value of the property, which was determined by the Property Appraiser's Office. By law, each taxing authority is required to schedule two public hearings to listen to taxpayers before setting the tax rate.

The local officials are usually available to answer questions regarding the proposed taxes and the tax bill. For further assistance, an independent advisor can be contacted.

Florida real estate owners should not waste any time to examine the “Truth In Millage” (TRIM) Notices. The purpose of the TRIM Notice is to inform property owners of their new Proposed Property Taxes. The TRIM Notice compares the proposed market value and assessed value of the property to the previous year. The new Tax Bill will be set in November 2010. Once the bill is passed, it will be TOO LATE to contest it. Therefore, owners who think their Proposed Taxes are too high must act quickly to take action by the mid-September 2010 deadline.

Real estate owners in Miami-Dade, Broward, and Palm Beach Counties can contact the Property Appraiser’s Office to discuss the TRIM Notice. They can also attend the various public hearings noted on the Notice to express their views.

All property appeals (Petitions) must be filed by the mid-September 2010 deadline with the appropriate Value Adjustment Board. The taxpayers who choose to appeal their proposed taxes can contact an independent Real Estate Appraiser to provide a Fair Market Value Estimate for their property in order to have the right ammunition to challenge their assessments.

Miami-Dade, Broward, Palm Beach residents, one of the reasons an assessment might be higher could be if the property was purchased as a foreclosure sale. The purchase price could have been lower than what other similar properties sold for in the subdivision. Previously, The Florida Department of Revenue (DOR) did not allow foreclosure sales to be used for assessment purposes. Therefore, although your property was bought for less than other properties in the neighborhood, your assessment was based on the actual market value of the immediate area.

However, since the tax year 2009, the DOR allowed the Property Appraisers to use “qualified” foreclosure sales as part of the assessment process. A foreclosure sale is determined “qualified” if it was listed on the MLS and if it was sold in normal/good condition. Short sales are also allowed to be used for assessment purposes. Since the economic recession, short sales and foreclosure sales have been the predominate sale type in the market and they reflect the current market values.

Another reason why an assessment might go up while values are lower could be due to the property exemptions such as Homestead and “Save Our Homes” (SOH). If your property value is less than the area market value due to your Homestead and your “Save Our Homes” (SOH) exemptions, a Florida Homestead “recapture” Rule allows the Property Appraiser’s Office to increase your property value each year until it reaches the overall market value of the area, up to the 3% annual cap. According to the Department of Revenue, the “Save Our Home” increase rate is set at 2.7% for the year 2010.

If you think your proposed assessment is too high, you have the right to attend the public hearings to let the elected officials hear your concerns. You also have the option to appeal the proposed assessment.

The deadline is approaching! September 2010 for your Palm Beach County, Miami-Dade, or Broward County Property Tax Appeal. If your assessment is unfair or too high, and your property taxes are climbing needlessly, it's time to involve an appraiser. The biggest mistakes people make:

1. Not acting immediately. There is always something else to do, but letting the deadline pass just settles things. The easiest way to ensure you don't miss it is get the appraiser involved with a simple [registration form].
2. Not involving an appraiser. Showing up at the appeal hearing without an independent appraisal leaves it your word vs. a more experienced county assessor. Assessors don't intentionally overvalue properties, but they have an immense number of them to assess, very little time, money, or manpower to get it done, and the result can easily be an overvalued property.
3. Thinking there's nothing you can do. The majority of property tax appeals result in a lowered assessment, but the only thing that happens if you do nothing is a steady climb. Stop the bleeding - if you think it's too much, turn to an appraiser for a 3rd party appraisal with clout.

Clients who are refinancing sometimes think that the appraisal report will increase the assessed value on their property taxes if the new estimated value is higher.
 
However, per Florida Statutes, all property in the state is reassessed every year by the Property Appraiser’ Office. The amount used for the tax bill is based on the qualified sales in their neighborhood (excluding sales not considered arm’s length transactions) in the previous year. Therefore, the refinancing of their home does not have any impact on property tax assessment.

That said, if you feel your property tax assessment is too high, keep in mind that most appeals result in a reduction. The first step is to involve an appraiser.