What it Means for Finances - Property Tax

Dated: July 17 2020

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If you own a home, you have to deal with property tax. This is one of the main ways local and state governments get income to provide its citizens with public schooling, police protection, and other services. Each homeowner pays an amount that depends on the value of their property and the local tax rate. To calculate your property tax, you’ll first need to know how the authorities determine both of these figures.

Your Home’s Value

Every January 1, state-assigned property appraisers determine the market value of each property. Appraisers subtract relevant land classification differentials such as those related to agricultural or conservation lands. Lastly, they take into account any exemptions due to the home or homeowner.

The Homestead Exemption

If your Florida home is your primary residence or the primary residence of your dependent, you’ll receive a homestead exemption that entitles you to at least $25,000 and as much as $50,000 off of your property tax bill.

Save Our Homes Assessment Limitation

When you receive a homestead exemption, a property appraiser will assess the market value of your home. This number is known as the property’s “just value”. The first time that a homeowner claims a homestead exemption, he or she will pay property taxes based on the just value appraisal. Each following year, the Save Our Homes (SOH) program prevents the home’s value assessment from increasing by more than 3 percent.

Individual Exemptions

Florida also offers special property tax exemptions for populations that it deems to be financially vulnerable. These populations include:

  • Military Veterans and active duty service members.
  • People with total and permanent disabilities.
  • Senior Citizens.

Florida Department of Revenue offers more information about these discounts as well as details as to who might qualify.

The Averages and Extremes of House Taxes In Florida

The average Florida property tax rate is 1.1 percent of the home’s assessed value. It's slightly below the national average of 1.21 percent. However, the effective rates vary significantly by county. For example, Walton County has a property tax rate of just 0.55 percent, which means that the average pays just around $1,000 per year. Hendry County’s on the other hand, has an average tax rale that’s close to 1.4 percent, but annual tax payments are below $975. The highest annual payments happen in Monroe County, where the average resident pays up to $2,800 in taxes despite the tax rate of 0.71 percent.

Local Level

Even the average rate per county can be only a vague estimate of what a person might owe, largely because so many other entities participate in levying property taxes. The county levies its own tax, but so does the city, the local school board, and other special districts. It falls to local officials to determine the millage, or tax rate, for those within its jurisdiction.

In all locations, the State of Florida's real estate taxes is limited by a government-imposed cap. The government also requires municipalities to public hearings that may affect tax rates and budgets that may impact property taxes.

What do you owe?

It may seem that everything about property taxations is your of your control, you do have government-enforced protections when it comes to your home’s individual value.

Your Rights

Every August, property appraisers send our Notices of Proposed Property Taxes (TRIM) notices to the owners of each assessed property. These notices also include the millage rates that the local municipality has imposed. Although you have the right to attend the budget hearings that confirm the millage rates, you as an individual citizen formally dispute those amounts. You can, however, appeal your property value assessment in a hearing before your county’s Value Adjustment Board.

Property Tax Calculation

If you want to calculate your property taxes before you receive a formal bill, you can do so either manually or using an online estimator.

Manual Calculation

To determine your own property tax, you’ll need to know your home’s:

  • Just value
  • Assessment limits,
  • Exemptions, and
  • Millage (tax rates of mill rates).

You may have different mill rates for school taxes and non-school taxes, just as you may have exemptions that only apply to non-school taxes. Once you have all of the data that’s specific to your home, you can:

  • Subtract your assessment limits from your just value to get your assessed value.
  • Subtract any exemptions from your assessed value. This gives you your home’s taxable value. (Remember, you may have to do this once for school taxes and once for non-school taxes.)
  • Multiply your taxable value by your millage, once for school taxes, and once for non-school taxes, to get your total tax liability.

Automatic Calculation

If you don’t want to go through the process of calculating all of your home’s relevant data, you can use an online calculation tool to determine what you will owe in property taxes. You will still need to know the assessed value of your home, as well as basic location information. Some ask for zip code; others request the name of your county. The calculator will determine what taxes apply to your location.

Can’t Pay Your Property Tax?

Theoretically, because property tax is based on your home’s value, your tax liability should be within your budget. In reality, however, it doesn’t always work out that way. Between purchasing a home and the levying of property taxes in a given year, you may have taken of financial obligations that tap your resources. If the tax you’ve calculated is out of your budget, you may think that the only thing left to do is move. You may be able to reduce your property tax bill by relocating elsewhere, but the process of moving costs money.

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Holly Dandridge Madden

Your Edge in Real Estate! Holly Madden has a passion for selling Brevard County real estate, homes, houses, and condos and a personality that creates lifelong friendships. 15 years with a Fortune 500....

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