By Oscar Dorr, Charlotte Sun-Herald Newspaper. Reprinted with permission.
Probably one of the more unpopular responsibilities of the average citizen is the payment of taxes. Even though we may realize the importance of taxes to support our county government and its services to the public, many of us gripe and complain. A good portion of the local tax revenue in Florida is based on property valuations.
Unlike many states, Florida has no income tax, which places the main burden on the property owner. Florida law requires that the just value of all property be established each year on Jan. 1. That ensures that as property values increase, the just value must be adjusted. That valuation is determined by law to be the “full cash value” and the “fair market value” or, in other words, the most probable price people would pay for it. It is the job of the county property appraiser to make that determination. When market values change, up or down, so does the value of the appraised property change.
Contrary to popular opinion the property appraiser determines only the value of the property, not the amount of the tax. The tax rate (millage) is determined by the taxing authorities which may include the city council, county commissioners, school board, special districts, etc.
The current Charlotte County Property Appraiser is Frank Desguin, CFA, CAE. The letters after his name stand for Certified Florida Appraiser and Certified Assessment Evaluator. Both of these professional certifications require extensive study and examination, plus annual refresher training. His salary is about $112,000 which includes the bonus for appropriate certification and training. He has a staff of about 67 located in three offices in Murdock, in the Charlotte County Administration Building; in Punta Gorda, in the South County Annex at Taylor Street and Virginia Avenue; and in Englewood, at the West County Annex, 6868 San Casa Drive.
The Charlotte County Property Appraiser’s Office is faced with a daunting task. Mr. Desguin and his staff must evaluate more than 210,000 individual land parcels, including thousands of acres of citrus, pasture and farmland, and the buildings and improvements every year by law. Additionally, the office of the property appraiser is responsible for processing more than 43,000 homestead exemptions, and an additional 10,000 exemptions for religious, charitable, educational or governmental use. There are also exemptions for widows, widowers and those with disabilities. The staff must also determine if a property is entitled to an agricultural classification.
Evaluation of any piece of property is a difficult task. The property appraiser must know:
- What similar properties are selling for.
- Cost of replacement of improvements.
- Operating and repair costs for income producing property.
- Income produced.
- Cost of borrowed money
The evaluation analysis can become complicated. One property may have sold for more or less than the true worth for personal reasons of the buyer or seller. A second method used in the analysis is based on the cost of current materials and labor to replace your property with another identical property. If the property improvement is not new, the amount of depreciation must be determined. In the case of income producing property such as an apartment complex, retail store space or office building, some of the factors are:
- Operating expenses
- Maintenance cost
- Financial risks
- Expected return on investment
Since law requires all property to be evaluated annually, any improvements (e.g. swimming pool) will result in an increase in the valuation. Likewise, any unrepaired fire or windstorm damage could decrease the property value. Also, market forces such as supply and demand could have an impact on property valuation.
The Florida constitution provides for a homestead exemption deduction in assessed value for the primary domicile of a legal, permanent resident of the state of Florida. (Every person who owns and resides on real property in Florida on January 1 and makes the property their permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxes.) There is no length of residency requirement to be considered a legal, permanent resident. (Snowbirds are not eligible unless the Florida residence is the primary domicile.) The application for homestead exemption must be made through the office of the property appraiser after the deed or other title conveying instrument is recorded by the county clerk. Proof of legal residence may be in one of several forms. These include:
- Voter registration card.
- A Declaration of Domicile (non-citizens, or those not on the voting rolls).
- A Florida driver license (“Valid in Florida Only” licenses are not acceptable).
- A Florida vehicle registration for all vehicles owned.
- For property jointly owned, residency information is necessary for both husband and wife.
- For non-citizens, a resident alien “green” card.
- For property held in trust, a copy of the trust agreement.
- For mobile home residents, the real property decal number and a copy of the registration or title.
- Applicant’s Social Security numbers, for both spouses if married.
- A copy of the property recorded deed, or contract for deed, or copy of the most recent paid tax bill with parcel identification number.
Some citizens are confused by the terms assessed value and appraised value as they pertain to real property. The appraised value, also referred to as “just” or market value, is the valuation placed on the property by the appraiser as of Jan. 1 of every year before any deductions are made for homestead or other exemptions. Florida law requires the appraiser accomplish the evaluation annually. The appraised value can fluctuate up or down, depending on several factors including improvements added, such as a swimming pool, or reduction for storm or fire damage. A comparison with selling prices of similar properties may also result in a decrease or increase in appraised values. However, the Florida “Save Our Homes” (SOH) law also can have an effect on assessed value. It gets a bit complicated to explain, but in the year following the year the homestead exemption is received, any increase in assessed value not resulting from new construction is limited to 3 percent, or the percentage increase in the Consumer Price Index (CPI), whichever is lower. If the property ownership changes, the SOH limitation is erased as the property’s assessed value must revert to “just” or market value on Jan. 1. Prospective property buyers should base their estimate of future property taxes on the current market value, not the present assessed value. Properties not receiving homestead exemption are not eligible for the SOH limitation.
Desguin, Charlotte County’s Property Appraiser, should be contacted if you have evidence the appraisal of your property is higher than the actual fair market value. For a significant difference, you may request a hearing before the Value Adjustment Board by petitioning in writing the County Clerk of the Circuit Court who also serves as clerk of the Value Adjustment Board during the period late August to early September. Petitions are available at the Property Appraiser’s Office, or online at www.ccappraiser.com.
The taxable value is the valuation that, after all exemptions, is listed on the tax rolls subject to the tax rate measured in “mills” assigned by the taxing authority. A mill is equal to $1 per $1,000 of taxable value. A tax rate of 15 mills means $15 in taxes for each $1,000 of taxable value. A simplified example might be to compute the tax on a home that has an assessed value of $75,000. After deduction of the $25,000 homestead exemption, the taxable value is $50,000. Next, divide $50,000 by 1,000 to get the taxable value of $50. Suppose the tax rate is 15 mills. Multiply $50 times the tax rate of 15 mills. This gives us the amount of ad valorem (in proportion to the value) tax of $750 for which you will be billed by the tax collector.
In addition to the homestead exemption discussed above, Florida residents may be eligible for the following exemptions:
- Widow’s/Widower’s Exemption – $500 (Does not apply to divorced persons)
- Disability Exemption – $500 (Requires proof of total and permanent disability, or proof of legal blindness)
- War-time Veteran’s Disability – $5,000 (Requires proof of 10 percent or more war-time disability from the Veteran’s Administration)
- Total Exemption of Homestead Property for quadriplegic, paraplegic, hemiplegic, or other totally and permanently disabled persons, who must use a wheelchair for mobility, or are legally blind. (Except for quadriplegics, there is also a gross income limitation for this exemption, covering all persons residing upon the homestead)
Properties owned by “not for profit” organizations and used exclusively or mainly for charitable, religious, educational, governmental, literary or scientific purposes may be totally or partially exempt from taxation by the county. The property appraiser must review applications for such exemptions to ensure compliance with the law. Property used totally for exempt purposes will be totally exempt from taxes; property used partially for exempt purposes will be evaluated to determine the ratio of exempt to non-exempt use.
Florida law allows mobile homes to be registered with a license decal annually, similar to an automobile registration, or assessed on the tax rolls as real or tangible personal property. The choice is left to the taxpayer unless the owner also owns the land where the mobile home is located, and it is permanently mounted on the land. In that case, the home will be listed as real property.
Florida law does not tax tangible personal property unless it is used in a business or in a rental unit for the generation of income. Tangible personal property includes machinery, equipment, furniture, fixtures, even mobile home attachments on rented land such as carport, screened porch, Florida room, etc. Intangible personal property such as stocks, bonds and like investment documents are taxed by the state of Florida under the Department of Revenue.
Finally, certain properties used for bonafide or “good faith” commercial agriculture purposes are eligible to receive an agricultural classification which will normally result in a more favorable valuation than the same property used solely for private or personal purposes. If the property also contains a dwelling, that portion of the property will be treated as any other residential property.
It is apparent that the Charlotte County Property Appraiser has an important and valued position of responsibility whose duties are established by Florida Statutes.
The cooperation and assistance of Mr. Frank Desguin and his staff in preparation of this report is gratefully acknowledged.