Property Taxes in Florida

Factors that influence the amount of taxes

In addition to market rates, property tax also depends on the tax rate charged by different local authorities. Indeed, real estate is necessarily subject to taxation by several different entities, including county and city governments, the school district, the hospital district, and the water utility. Additional taxes may also apply in some urban communities. On the other hand, property exemptions and the Save Our Homes amendment (SOH) help to limit the amount of property tax payable.

County taxes

The amount of county property tax varies depending on the value of the property itself; however, it also varies depending on the county tax rate and the owner’s place of residence within the county. Indeed, within the same county, regions are organized in different ways, some with lower property taxes than others. For example, the owner of a property in Miami Beach or in Downtown Miami is likely to pay more in property taxes than the owner of an identical property in Kendall.

The average real property tax rate in Miami-Dade County is 1.04% and in Broward County it is 1.12%, compared with a national average of 1.08%.

Community development district taxes

In Florida, people living in a developing city or district typically pay additional taxes. These taxes allow developers to provide equipment aimed at improving the lives of residents. By sharing the cost of community and land development among residents, it is possible to design infrastructure such as recreation centers, parks, walking trails, and sports facilities.

Depending on the community, the tax is divided into two parts:

• The first is a fixed amount payable for a fixed period.
• The second varies from year to year depending on the needs and budget of the community. Any investor considering buying real estate in Florida should find out about the amount residents pay each year, as the amounts vary widely depending on many factors.

Homestead exemption 

Under the homestead exemption, anyone legally residing in Florida can deduct $25,000 from the assessed value of their primary residence. In addition, certain categories of owners (for example, people 65+, people with veteran status, or people with certain disabilities) may also benefit from other exemptions. However, the family property exemption of $25,000 is not granted automatically; to qualify, you must purchase real estate in Florida before December 31st and apply for the exemption by March 31st of the following year.

Effective January 9, 2008, owners of qualifying Florida real estate can also benefit from an additional exemption of $25,000 under Amendment 1. This exemption is automatically granted to any owner who requests it and whose initial waiver request is approved.

Save Our Homes amendment

The SOH restricts soaring property prices in Florida. Under the SOH, a maximum percentage increase is defined, —evaluated at 3% or calculated on the basis of the Consumer Price Index—guaranteeing to any owner who benefits from a property exemption that the assessed value of his property will not increase by more than 3% per year. The SOH protects current owners in Florida; however, it does not apply to non-residents and persons whose property in Florida is not their primary residence. In addition, the cap on the assessed value is automatically lifted when the property changes hands. Therefore, it is in the best interests of people wishing to buy real estate in Florida to rely on the market value of that property at the time of sale and not on the tax assessment of previous owners. This is because it is possible that the assessed value of the house is artificially low, especially if it has been owned by the same owner for many years.

About non-residential property

Under Amendment 1, there is also a valuation ceiling for non-residential properties. This is a 10% cap limiting the increase in residential and non-residential property other than the primary residence. As of January 1, 2008, all non-residential properties are therefore mark-to-market only. However, the increase in real estate from one year to the next is capped at 10%. In addition, the assessed value of the property cannot exceed the market value. This means that the assessed value of non-residential properties equals market value, regardless of the performance of the Florida real estate market.