To Homestead Or Not To Homestead?

Many Floridians are unaware of a state rule passed in 1995, which requires assessed property values to grow by 3 percent or by the Consumer Price Index, whichever is less, as long as the property’s market value does not dip below the assessed value. Therefore, even homeowners whose market value dipped this past year may see lower savings or even a slight increase in their taxes.

I think that this law needs to be immediately eliminated or amended. Why? This law works against many that are homesteaded versus those homeowners that are not. According to Kurt Wenner, director of tax research for Florida TaxWatch, “this could be the first year where people under Save Our Homes taxes go up, and people with non-homestead properties go down.”

Last year, voters overwhelmingly approved Amendment 1, which effectively doubled the homestead exemption for primary homeowners to $50,000 and made the Save Our Homes tax protection more portable. This amendment also placed a 10 percent cap on non-homesteaded properties.

So Florida snowbirds, second or investment property owners, who have been left out in the cold for so long on property taxes, may find that their property tax bills falling this year, together with real estate market values.

If you would like to consult with us on your tax situation or value of your property, please contact Ross at info@miamiangelproperties.com or call 305.673.5300.

Florida’s Property Tax Conundrum

Working with buyers of Miami residential real estate can be a lot of fun and full of adventure. We have so many unique neighborhoods, eclectic architectural styles, and such a diverse culture, including homes from tropical bohemian bungalows in Coconut Grove to high-tech modern waterfront homes on the Venetian Isles. Eventually, however, you have to cross that shaky old “real estate tax” bridge. PROPERTY TAXES ARE WAY TOO HIGH, and are a major factor in the property buying decision process.

YES, prices have come down considerably, and in some cases way below the threshold that any of us in this business imagined. Fantastic, that $2.1 million home in the Grove is now available at $850,000!

YES, unless you are in the $5 million and up range, there is a huge inventory of properties to choose from across the board. Superb, short sales and foreclosures galore!

YES, with only a minimum required down payment of 3%, attractive FHA financing is available. Wooohoo, my bank offered me is an amazing rate of 5.5% on 30YR fixed rate mortgage!!

SAY WHAT? Although my purchase price is $129,900 and I am purchasing a wonderful foreclosure property at 40 cents on the dollar, the property appraiser is not going to adjust my market value down to the purchase price in 2009!

According to the Miami Dade Property Appraiser, the current market value of this home is $322,205, and the 2007 real estate taxes were $8,113. This means that I am required to pay as much in real estate taxes as in principal and interest. Does that sound reasonable and workable to ANYONE?

There is some silver lining in this box. Several proposals are out there to drastically reduce the cost of real estate taxes in Florida. People we need to get with the program and talk to our Florida legislators. Check out one proposal out there called Cut Property Taxes Now, for example. They propose capping property taxes to a maximum of 1.35% of market value.

No matter which direction you think best, let your voice be heard and let’s push for CHANGE!

If you would like a FREE consultation on the value of your property or to discuss your real estate tax situation, please feel free to send us a request at info@miamiangelproperties.com or call Ross at (305) 673-5300.