What goes down may soon go up
What’s the fastest way to get a headache these days? Well, you could try and figure out what the heck everyone in Washington is talking about regarding health care, or you could try and decipher the instructions that came with your latest electronic gadget. Or you could try and understand the Florida property tax statutes, guaranteed to have you running for the aspirin bottle.
During a time when property values around the state of Florida have fallen between 30 and 40 percent, the property taxes of homesteaded homeowners may be going up. Now before you get too crazy, in most cases the increases, should they occur, will be moderate. But in this economy, even $100 a year can make you want to beat your head against the wall. Here’s the reason why:
As part of the Save Our Homes Amendment that full-time Florida residents have been enjoying since the early 90s, there is a provision called “recapture.” This provision requires property appraisers to increase the assessed value of any house with a homestead exemption by 3 percent or the inflation rate, whichever is lower. That means that even if the market value of your home goes down, its assessed value will increase by about 3 percent. This will impact homesteaded homeowners who have owned their homes for years to a greater degree than property owners who may have purchased near the peak of the market. As you will recall, the original amendment caps increases in taxable property values at 3 percent for qualified homesteaded properties.
The rule was meant to help local governments recapture some of the market value which had been shielded from tax collectors by the Save Our Homes Amendment. Since no one in Florida ever expected property values to fall to the degree that they have, the obscure rule is just now rearing its ugly little head.
In addition, last year homesteaded owners benefited from the doubling of the $25,000 homestead exemption. That additional savings could disappear because of the recapture rule. Also, school taxes and the cost of other essential services can be expected to increase in order to compensate for the overall loss in revenue the state and counties are experiencing.
Of course, the flip side of this is that non-homesteaded homeowners who are seeing sharp declines in their property’s market value will also see declines in their taxable assessment and ultimately their property taxes. According to the Sarasota-Manatee Herald Tribune, on average homesteaded properties in our area will go up $78 a year and non-homesteaded properties down $220 per year. Since Anna Maria Island has a large number of non-homesteaded owners as well as a high level of valuable property, the savings for these people can be substantial. The good news here is that lower real estate taxes as well as competitively priced properties could have a very positive impact on the Island’s real estate market.
Tax notices for this year will be mailed shortly, so if you’re anticipating a headache you might want to have the aspirins or something a little stronger handy. It almost makes you wish we were all still living in caves.