Property Tax Woes

A lower front page article in this mornings St. Pete Times discusses the on-going angst over property tax relief efforts at the State level. The self styled “Property Tax Crisis” described needs clarification as much as it needs relief. First and very importantly, the mission of the County Property Appraiser in each of Florida’s 67 counties is mandated to be valuing all properties at 100% of “market value” and reporting that valuation to the Florida Department of Revenue. The aforementioned “market value” is based on the very same data that appraisers have been using to provide those indications of “market value” for buyers and sellers. Although I received many phone calls of concern last year when the “TRIM” notices were sent in advance of tax bills my only advice to concerned owners is that in the near term there is little to do. As hard as it is to hear this it’s hard to have it both ways. You cannot expect to enjoy the fruits of escalating values without them being reflected in new property tax valuations. Further, once the property valuations have been made it is difficult to get them lowered now or in the near term. Curiously the same aberrant market conditions of an investor driven market have and will continue to lower “values” and truthfully neither extreme is truly representative of that definition. Going forward the likelihood of “Property Tax Rollback” is as much a function of the demands of local government and out of the domain of the state. In other words once the valuations are filed and accepted by the state, the property appraiser is through. With these unprecedented price increases in place the stage is set for county and city government and special taxing districts to set their budget based on expected revenues. The local government entities have shown reluctance so far to backing off of the opportunity to spend for heretofore unbudgeted items, some no doubt necessary and others maybe, well, “not so much”! What is likely a popular compromise is the ability to make a homestead exemption basis portable or at least re-instate at less than the new amount for an existing property owner. Otherwise the effect is felt in a portion of now unqualified buyers especially after adding in the uncertainty of insurance costs. However that is not the only answer to the problem, it is also the market which is in the process of adjusting as any market based upon supply demand (and all are) and will find a new price level necessary to attract buyers before the cycle at some point begins again. As noted earlier the property appraisers for each county will attempt to make strong arguments for the case that the downturns are the aberration not the overheated market results. There will be some serious battles between owners and property appraisers over the next several years and rightly so. The owner must be well prepared, unemotional and be well represented to appeal to the “special master” employed by each county as a mediator.