August 27th, 2007 6:24 AM by Ron Mastrodonato
Property values, tax bills decline
Homestead no protection against tax increases this year
Florida homes have a market value (estimate of worth) and an assessed value (basis for property tax calculations). An owner’s assessed value, at first, should be market value minus $25,000, the homestead exemption and the local government applies its tax (millage) rate to that number. But Save Our Homes also impacts assessed value by capping it at a maximum 3 percent yearly increase. However, that cap is a yearly tool and applies anytime assessed value is below market value (minus $25,000). And for many of the state’s long-time homeowners, assessed value is significantly less than market value (minus $25,000). These owners will still see a tax increase this year, even if their market value of their home declines, as long as there is a gap between the just market value and assessed value of their home. In addition, SOH applies only to assessed values. If a local government opts to increase millage rates, property taxes for homesteaded homeowners would also go up. For more information, visit the Florida Department of Revenue Web site at: http://dor.myflorida.com/dor/property/about_us.html
WEST PALM BEACH, Fla. – Aug. 23, 2007 – Palm Beach County’s property appraiser mailed more than 620,000 property tax notices on Tuesday, and the preliminary bills show two things homeowners haven’t seen in years: falling values and falling tax bills.Of the 620,647 residential and commercial properties in Palm Beach County, 59 percent are worth less this year than last, said John Thomas, assistant director of residential appraisal services at the property appraiser’s office.Thomas couldn’t say how much the average decline was, but some homeowners saw drops of 10 percent or more. Because the property appraiser’s values are based on the price on Jan. 1, Thomas predicted another drop in values on next year’s tax bills.“Unless things change radically, you’ll probably see it go down again next year,” Thomas said. “At least in my opinion, that’s just the beginning of the declines.” Palm Beach County home prices have been in a slump since late 2005, when the speculative frenzy of real estate sales and double-digit price increases subsided.Meanwhile, the number of homes for sale has continued to grow. Nearly 25,000 homes are for sale in Palm Beach County, according to Illustrated Properties Real Estate. At this time last year, 22,000 homes were on the market, according to Illustrated’s Web site.For longtime homeowners with homestead exemptions, the drop in market value will have no effect on their tax bills. That’s because the Save Our Homes amendment to the state constitution allows homes’ taxable values to rise 3 percent a year even if the market value falls, as long as the taxable value remains less than the market value.But a property tax cut that state lawmakers mandated in June is creating savings for homeowners. The property appraiser’s office hadn’t calculated the average tax cut on Tuesday, but a recent Florida TaxWatch Inc. study predicted the cuts would be worth $174 for the typical homesteaded property.Although most home values fell in Palm Beach County, high-end properties still rose in value. In one high-profile example, the oceanfront mansion billionaire Donald Trump is marketing for $125 million was appraised at $58.2 million this year, up from $56 million last year, a 4 percent increase.Commercial property values also are rising, Thomas said, as offices and shopping centers have continued to sell for record prices.Copyright © 2007 The Palm Beach Post, Fla., Jeff Ostrowski. Distributed by McClatchy-Tribune Information Services.