Deciphering your property tax bill
Did you get your 2008 tax statement yet? Do you have any clue what it means? If not, join the majority of Manatee County homeowners. Confused would be a gross understatement to describe the way most property owners are feeling this week. They were expecting a decrease of at least several hundred dollars in their 2008 tax bill, but instead, many saw much less than that and some even had an increase.
There are two reasons for our tax bill not being as low as we might have anticipated. The first reason is based on the doubling of the homestead exemption from $25,000 to $50,000 which was part of Amendment 1 approved by Florida voters in January. The extra $25,000 homestead exemption only applies to less than half of your tax bill since school taxes are excluded in this exemption. This part of the amendment was clear when we voted it into law in January, however, until you see the numbers in black and white the impact isn’t the same.
The second reason the tax bills are not as low as we anticipated is because of a little-known rule called the Recapture Rule, which is part of the original Save Our Homes Amendment passed in 1995. This rule gives the property appraiser the ability to raise the assessed value of a homesteaded property by a maximum of 3 percent on all properties assessed at less than full market value whether or not that property’s value increased during the calendar year.
Got that? Well here’s an example: your property’s market value increases by 10 percent last year. Since you are homesteaded the property appraiser can only increase the value by 3 percent under Save Our Homes. Next year, your property valued did not change or went down. Since its assessed value under Save Our Homes remains under market value, the property appraiser must increase the assessed value by 3 percent to bring its value closer to full market value. In order words, since your property value did not increase, you couldn’t benefit from the 3 percent cap, and your assessed value was required to go up by that amount.
This is exactly what happened on my personal tax bill, the assessed value went up exactly 3 percent. My overall taxes still went down over $100, but like everyone else, less than I expected.
Non-homesteaded property owners who have never benefited from the Save Our Homes Amendment are not subject to the 3 percent Recapture Rule and will probably see a larger tax cut.
Nevertheless, 90 percent of homesteaded owners will see actual savings on their assessments just not as much as they thought, and 88 percent of non-homesteaded property owners will pay less.
Even though you may be a little disappointed now, I still feel that passing Amendment 1 in January was a good thing. The amendment also contained the portability provision allowing you to transfer your Save Our Homes cap up to $500,000 if you move your primary residence and a cap on non-homesteaded properties. I feel both of these changes will have a positive affect on the real estate market in the years ahead.
If it’s any consolation, the property appraiser states in his letter, "This will be the first time since the adoption of the Save Our Homes Amendment that this rule will come into effect as the result of declining market values in some areas."
So if you’re feeling clueless about your property taxes, you’re not alone. I bet even Charles Hackney is a little confused.