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What Is Just Value?
Property can be valued by using different metrics, including its worth on the market. This market value of a property is also called its “just value." Fair market value represents what a property will sell for in current market conditions, which may be quite different than its original selling price. And it’s the fair market value that municipalities use as one indicator of a property’s value for tax purposes.
Fair market value isn’t an arbitrary designation; it meets the test of an arm’s length transaction. This means the fair market value of a property must meet certain conditions. For fair market value be determined, a buyer and a seller, both of whom are unrelated, must be informed about the real-estate transaction and on equal footing with their bargaining power without being pressured to buy or sell.
Florida Property Taxes
In addition to evaluating a property’s just value for assessing property tax,
Assessed Property Value
Save Our Homes Property Assessment
By capping the increase in property taxes, the SOH assessment limitation ensures that the assessed value cannot exceed the just value of a property.
Save Our Homes Portability Transfer
Eligible property owners in
To qualify for the SOH portability transfer, you’ll have to establish your homestead exemption in the new property within two years of Jan. 1 in the year after you moved from the former property (not two years from the sale of the property). You’ll also have to file Form DR-501T Transfer of Homestead Assessment Difference when you file your homestead exemption for the new property. Both forms must be filed by the March 1 deadline. After completing all required applications and forms, you’re allowed to petition the county’s value adjustment board if the property appraiser denies your application.
SOH Ownership Change or Transfer
In addition, a property’s loss or removal of homestead status also triggers its tax reassessment as well as its SOH benefit. If your property’s homestead status changes, contact your county appraiser to avoid any penalties.
Some exceptions that will not result in a reassessment are:
- Changes or transfers between spouses
- Some transfers upon the death of the property owner
- Eligible transactions both before and after transfers that allow the same persons an entitlement to the homestead exemption
Taxable Property Value
After the assessor deducts the SOH assessment from a property’s just value to arrive at its assessed value, the tax collector calculates a property’s taxable value after also deducting any eligible homestead exemption. This taxable value is the value on which taxes are determined for each property owner.
Florida Homestead Exemption
If the property you own is the permanent residence of you or your dependent, you may be eligible to claim a homestead tax exemption up to $50,000. Divided in two parts, the first half of the homestead exemption ($25,000) is for all property taxes (including school district taxes), and the second half (up to $25,000) is dependent on the property's assessed value that's between $50,000 and $75,000 (not including school district taxes).
By filing Form DR-501 Original Application for Homestead and Related Tax Exemptions in the county where the property is located, you can apply for the Homestead Exemption. You'll need to provide proof of ownership, and you may also need to provide other forms of identification, including your Florida driver's license, Florida vehicle license plate number, voter registration number and proof of utilities payments at the homestead address.
Examples of Calculating Homestead Exemptions
If your property's assessed value is $45,000, you're eligible for a $25,000 tax exemption. The remaining $20,000 of your property's value is taxable, because it's less than the $50,000 minimum to be eligible for the additional homestead exemption.
If your property's assessed value is $65,000, you're eligible for a $25,000 tax exemption. The next $25,000 of assessed value is taxable, but the remaining $15,000 is eligible for exemption from nonschool taxes.
If your property's assessed value is $85,000, you're eligible for a $25,000 tax exemption. The second $25,000 of assessed value is taxable, but the third $25,000 of assessed value is exempt from nonschool taxes. The remaining $10,000 balance of assessed value is taxable.
Florida Property Tax Process
After determining each property’s taxable value, the county appraiser sends a Notice of Proposed Property Taxes to property owners in August. When the local government determines its annual budget, county tax collectors send each property owner a final tax bill in late October or November, and the property owners must pay their taxes by March 31 of the following year.
- Florida Department of Revenue: Property Tax Information for First-Time Florida Homebuyers
- FitsSmallBusiness.com: What is an Arm's Length Transaction?
- Florida Department of Revenue: Save Our Homes Assessment Limitation and Portability Transfer
- Florida Department of Revenue: Property Tax Exemption for Homestead Property
- New York Department of Taxation and Finance. "Property Taxes and Assessments." Accessed Mar. 3, 2020.
- Maryland Department of Assessments and Taxation. "A Homeowner's Guide to Property Taxes and Assessments." Accessed Mar. 3, 2020.
- Louisiana Tax Commission. "FAQ." Accessed Mar. 3, 2020.
- City of Evans, Colorado. "What Do My Property Taxes Really Pay For?" Accessed Mar. 3, 2020.
- New York State Department of Taxation and Finance. "Property Tax Exemptions." Accessed Mar. 3, 2020.
- Georgia Department of Law. "Tax Foreclosures." Accessed Mar. 3, 2020.
- New Jersey Department of the Treasury. "$250 Senior Citizens and Disabled Persons Property Tax Deduction." Accessed Mar. 3, 2020.
- New York State Division of Veterans' Services. "Property Tax Exemptions For Veterans." Accessed Mar. 3, 2020.
- Oregon Department of Revenue. "Fire or Act of God—Tax Proration." Accessed Mar. 3, 2020.
- You can dispute your tax bill if you have evidence that the just value is inaccurate.
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.