Q. Is there a state limit on tax rates?
A. The maximum tax rate for a municipality in Florida is $10 per $1,000 in taxable property value, or 1 percent.
Q. How much is a typical tax bill including all local taxing authorities?
A. Adding together schools, counties and others, the bill usually will exceed 2 percent of taxable home value per year.
Q. How is my property-tax bill calculated?
A. You can multiply the tax rate by your taxable home value. For example, if your taxable home value and the tax rate for your city is $5 per $1,000 (or 0.5 percent), then your tax bill is $500. You would then have to repeat this procedure for your county, school board, etc.
Q. My TRIM notice mentions “assessed” and “market” values as well as a “taxable” value. What’s the difference?
A. Market value is the county appraiser’s estimate (usually conservative) of what you would get for your home if you sold it. “Assessed” is the value of your house for tax purposes, before the homestead exemption is applied. Taxable value is the value of your home after the homestead exemption.
Q. What is a “homestead exemption”?
A. Owner-occupied homes in Florida receive a $50,000 exemption from tax for all purposes except schools. For school-tax purposes, the exemption is $25,000. In other words, you can subtract these amounts from your home’s assessed value before calculating your tax bill. The exemption is not available to commercial property such as office buildings or shopping centers, nor to vacation homes or rental property.
Q. Why is my home’s assessed value less than the market value?
A. Under the “Save Our Homes” provision of Florida’s Constitution, the maximum annual increase in the assessed value of a house with a homestead exemption is either 3 percent or the rate of inflation, whichever is less. This year, it is 1.7 percent.
Q. Historically, don’t property values in South Florida go up faster than 3 percent?
A. Yes, sometimes much faster. Even after the recent housing bubble, home prices in many areas remain much higher than they were a decade ago. Save Our Homes is supposed to protect property owners from these increases.
Q. So “Save Our Homes” is good for homeowners, right?
A. It depends on how long you have owned your home. If you bought your home 15 years ago, your assessed value, as limited by Save Our Homes, probably is still much less than the market value. So you save money. But if your neighbor bought an identical home next door this year, he or she is paying tax based on the full market value of the house, less the homestead exemption. The result can be dramatically different tax bills for properties with about the same market value.
Q. So the government can charge me double the tax as my next-door neighbor? Is that legal?
A. Save Our Homes has survived several legal challenges. In effect, the government is “rewarding” people for living in Florida for a long time, and “punishing” newcomers. In a 1982 case called Zobel v. Williams, the U.S. Supreme Court struck down an Alaska program that allocated income from state-owned oil leases based on the number of years each resident lived in the state. In an 8-1 decision, the court held that states can’t discriminate based on length of residency. “Could states impose different taxes based on length of residence?” Chief Justice Warren Burger asked, in his opinion for the majority. “Such a result would be clearly impermissible.” This case has been cited in challenges to Save Our Homes, but so far, it hasn’t done any good.