Author Topic: Property Tax Question  (Read 3091 times)

FarmFam

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Property Tax Question
« on: November 08, 2014, 03:59:29 PM »
I live in Orange County Florida. 

I looked up comparable homes, same models, in my subdivision on the county tax website and found that the market value of all the homes were raised by 30%.  The homes where the owners did not live in were raised an assessed value of 1.5% and the homes where the owners did not live in were raised the entire 30% in assessed value same as the market value.

30% in market value increase in a year seems very excessive to me.  This also seems borderline unlawful.  Even credit cards can't charge more than 27%.

Does this seem legal in the state of Florida?  Or did the county appraiser go to far to increase property taxes revenues?

Ever other year there has only been a 1.5-1.7% increase in market values in all cases.  But I can only see the last 4 years online.

maizeman

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Re: Property Tax Question
« Reply #1 on: November 08, 2014, 04:43:46 PM »
The rate of increase really isn't relevant to your question. In theory your taxes are going up because the market value of the properties have also gone up. So you are paying higher taxes than a couple of years ago but also have a lot more equity in the house so you have a higher total net worth.

If you go on other websites like Zillow, have predicted sale prices for these houses increased 36 percent over the past four years (1.5% compounded annually for three years followed by a 30% increase)? If homes in your neighborhood are selling for the exact same price as they were four years ago, but the county says the houses are worth 36% more than they were four years ago then, then you'd have a good case for an appeal on the increased assessment (at least in my state, which is not Florida). But if the amount of money you could sell the house for has increased 36%, it's going to be hard to argue the value the county has assigned to your house is incorrect.

BlueHouse

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Re: Property Tax Question
« Reply #2 on: November 09, 2014, 07:59:02 AM »
The homestead exemption is likely the reason for the difference between the rate increases for resident vs. non resident homeowners. Mine caps prop value increases at 10% per year. So last year my assessed market value increased by 18% but taxable assessed value increased 10%.

FarmFam

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Re: Property Tax Question
« Reply #3 on: November 09, 2014, 09:15:53 AM »
Thank you both.  Your feedback helped me gain more knowledge to be able to research it better.

Here is what I learned.

There are a few ways to save on Property tax in our area; homestead, portability, and the Save our home cap which is 3%.

The same model homes as my rental have gone up 30% in market value.  The people who still lived there and get homesteads also got the SOH cap of 1.7%, not sure why not the 3%.  The homes that were not under homestead raised by 30% on assessed value as well.  I looked up the sales in the area and the 30% increase and the $140,000 value seems about right. The homes in the last year sold for between $95,000 and $180,000. 

At my homestead home, I also looked at all the sales and the value seems about right as well.  But I didn't get the SOH cap or the portability savings because I guess I was unlucky when I bought it.  If I had moved this year instead of last year, I would have had portability savings and cap savings on the other house.  But there was no way to predict this, so I am not going to beat myself up over it.  Also, I wouldn't have been lucky to have found this house at such a great price and the house is a rarity because it is the only one of its type that is less than 20 years old; mine is 10 years old, all others were last made in the 80's or older and are selling at the same price as mine and have less land.

The damage:
Rental home: $1200 to $2600
Primary home: $3600 to $3400
Increase of $1200! in property taxes.

WHAT CAN I DO TO LOWER MY PROPERTY TAXES?

Rental

As I was typing the above, I was trying to find out what else I can do to save on property taxes and came upon some new information.  But I am having trouble understanding it.

It looks like according to Florida Statutes, rental properties are capped at a 10% increase.  I didn't get this cap as I was assessed at a 30% increase.  If anyone can understand if I qualify by what is written in the statutes, please help.  I am just wondering if they didn't give me the cap because it became a rental in 2013 and the increase was in 2014 so maybe like the SOH cap, you don't get it the first year of the transition?

Quote
(3) Beginning in the year following the year the nonhomestead residential property becomes eligible for assessment pursuant to this section, the property shall be reassessed annually on January

1. Any change resulting from such reassessment may not exceed 10 percent of the assessed value of the property for the prior year.

http://propertytaxinflorida.com/2011/02/03/faqs-about-the-10-cap-on-commercial-property-assessments/

http://www.leg.state.fl.us/STATUTES/index.cfm?App_mode=Display_Statute&Search_String=&URL=0100-0199/0193/Sections/0193.1555.html

http://www.leg.state.fl.us/STATUTES/index.cfm?App_mode=Display_Statute&Search_String=&URL=0100-0199/0193/Sections/0193.1554.html

Primary

The primary home is on land classified A-2.  Which means that I can get an agricultural credit to lower the property taxes.  I tried to do this the first year we moved in, but it took a while to get everything moving.  I am thinking it will be faster to get and cheaper on our end to just rent the land out to cattlemen, but the going rate for that is $1 a year because people do it to save on their property taxes and don't care about getting any other profit from it.  I also know of someone who has his own grass fed cattle raising business and saves over $1000 per year on his taxes. 

I did the calculations and found that my taxes could go down by $1100 if I do the agricultural credit.  Less about $300 if my husband continues to not want the cattle on the section where our house is.  I can continue to try to change his mind by telling him he can save 10 hours a month on cutting the lawn, but his reasoning is that he doesn't want to walk into cow poop.
« Last Edit: November 09, 2014, 09:45:07 AM by FarmFam »

Rezdent

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Re: Property Tax Question
« Reply #4 on: November 09, 2014, 10:00:43 AM »
Look deeper into the ag exempt before leaping.

Here in Texas, you have to prove 5 years of livestock before the property qualifies. If the previous owner had an exemption and you put livestock in the same year you purchased you'll qualify.  If not, you'll need do it for 5 years and apply.
Application for us needed notarized affidavits from neighbors, pictures and receipts. Oh, and trips to the county office.

There are also minimums required.  I believe the minimum parcel size in our county is 10 acres.
I believe we also need a minimum of 17 female sheep or goats plus their "production" (babies) and a male. Cows have a different minimum.   Note that this is not tied to the size of the property.  If you are running 17+ sheep on 10 acres continuously the land will look like Mordor and you will spend more on feed than you would have spent on the taxes.

So yes, you can rent the land to a rancher for a dollar.  That rancher may not care that the land is overstocked or may not put the required minimum to qualify.
Lots of Texas ranchers take advantage of owners in this way.  It's a great deal for the rancher but sometimes not so much for the owner. 
The rules for your state may be more lax.  You may know a responsible, sustainable rancher.  It may be a great solution, but watch the pitfalls.  YMMV.

waltworks

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Re: Property Tax Question
« Reply #5 on: November 09, 2014, 10:27:27 AM »
Sounds like you got a smoking deal on your properties and values/taxes are rising. C'est la vie. You can always sell if you don't want to pay! :)

-W

Mrs. PoP

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Re: Property Tax Question
« Reply #6 on: November 09, 2014, 01:17:32 PM »
Our FL county shows multiple columns when we get the appraisals from our county Property Appraiser every year - market, SOH capped, and assessed. 
For non-homesteaded properties, the SOH cap is at a 10% increase each year (homesteaded is 3%) but you should know this doesn't cover every separate line item on your tax bill.  I don't have ours in front of me, but I think the schools portion of the tax bill applies that millage rate to the full assessed value and everything else uses the SOH cap value.   
If you still don't have a homestead exemption on your primary residence, I would apply for that.  In our county there is a window of time (maybe Jan - March?) each year when it needs to be done.  Call your county property appraiser's office.  The sooner you lock in a low base value, the slower your increases will be over time.

In general, I would just call the county property appraiser's office and ask questions.  I called quite a few times when we were sorting our property taxes after buying in 2009 (the valuations were a mess then and it took an appeal to get our assessed value where it should have been from the start).  They were always really helpful.