How Florida Property Tax Valuation Works

How Florida Property Tax Valuation Works

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Though Florida property tax appraisers must complete property valuations every year, they’re not always set in stone.

Just what goes into those valuations? The appraisers look at such factors as the current use of the property and the prices of similar ones that have sold. Fair market value, the current property tax or “mill” rate, and any assessment limitations or exemptions – as of January 1st — also make up your individual property tax valuation.

Every August, the Truth in Millage (TRIM) Notice shows the taxable value of your property starting next January 1st, which is the assessed value minus any exemptions. It also lists proposed millage rates and estimated taxes. And it tells you when and where your local tax officials will hold public meetings to discuss tentative budgets to decide your millage rates.

Local governments set the property tax or “millage” rates, which may vary by county. They typically range from under $10 to about $25 per $1,000 of taxable value. Mill rates are equal to a percentage of the per dollar of value of a property. Ten mills is equal to one percent. The appraiser multiplies the city or town’s millage rate by the property value to determine the amount of tax. So, if the appraiser values your home at $300,000 and the property tax rate is two percent, you will owe $6,000.

But, with exemptions, you may pay even less. Otherwise, if you’re unhappy with your property tax valuation, you may appeal to potentially lower your rates.

How Property Tax Exemptions Lower Your Rates

Exemptions, if you qualify for them, can reduce your annual taxes on your home or commercial property.

For homeowners, Florida offers a homestead exemption for single and married taxpayers. It also grants exemptions to veterans, senior citizens age 65 and older, the disabled, widows and widowers, and even the legally blind.

In Florida, the first year a residence receives a homestead exemption, the property tax appraiser assesses it at just or fair market value. After the first year, the assessed value can’t increase more than three percent of the Consumer Price Index (CPI), whichever is lower.

When a home’s market value increases at a higher rate than it was assessed, it results in a Homestead Assessment Difference (HAD) or “Save Our Homes” (SOH) benefit. This cap on the assessed value protects property owners from major tax increases. And if you’re eligible, you can transfer all or part of this one-time credit to another Florida property, even if you bought a new home, through portability.

The Florida homestead exemption for primary residences is up to $50,000 per year. It doesn’t apply to timeshares, second homes, or vacation homes. Permanent residence is determined on January 1st of each year. If a homeowner doesn’t use their home as their primary residence for one year – for instance, if they rent it — they can’t claim the exemption again until two years later.

Under Florida law, the “rental of all or substantially all of a home previously claimed to be a homestead for tax purposes shall constitute the abandonment of such dwelling as a Homestead, and the abandonment continues until the dwelling is physically occupied by the owner. However, such abandonment of the homestead after January 1 on any year does not affect the homestead exemption for tax purposes for that particular year unless the property is rented out for more than 30 days per calendar year for two consecutive years.” This doesn’t apply to members of the U.S. military.

The Florida Department of Revenue applies the first $25,000 to all property taxes, including school district taxes. The additional exemption up to $25,000 applies to the assessed value between $50,000 and $75,000 only.

Florida law limits annual increases in property value assessments on real property qualifying for and receiving a homestead exemption.

The non-homestead cap lets owners of second homes, vacation homes, and commercial properties, such as rentals and vacant land limit their annual property tax to ten percent, including school board assessments. You don’t need to apply. The appraiser will already add it. If you change ownership of the property or its use, you’ll no longer qualify for the non-homestead cap.

For commercial property owners, there’s also the tangible personal property exemption. It covers equipment, furniture, computers, and fixtures used in all business and rental real estate. Appliances used in rental properties, such as stoves and refrigerators, also qualify.

To receive this exemption, you must file a tangible personal property return. Once you qualify, you’ll get the first $25,000 in value for the tangible personal property.

All asset sales and business closures after January 1st will still require property tax payments for that year. You must file your return for the following year showing the disposition of assets and the date the change(s) occurred.

Florida law requires taxable entities with assets higher than $25,000 that control business or investment property to file a tangible personal property return by April 1st yearly. It must show each asset in each location.

Appealing Your Property Tax Valuation

In Florida property tax valuation, many ingredients go into the mix. Sometimes, despite exemptions, the assessed value on your annual TRIM Notice may be incorrect. Your tax assessment should equal the fair market value of your property. If decreases in market value, construction defects, or other factors have affected your property valuation, you can appeal. Florida property owners have the right to contest their assessed property value or exemptions through their county’s value adjustment board (VAB). But you must meet the filing deadline. If you don’t, you’ll miss the chance to lower your property tax valuation.

If you think your property’s valuation is wrong, contact us. We’ll use our years of experience fighting unfair property tax valuations to help you pay less tax and keep more money.