Sarasota real estate buyers freak out over outdated & inaccurate property tax records, forcing some buyers (not just 1st time home buyers) to think they can’t buy a home.
Take a deep breath & see how easy it is to understand Sarasota County's tax bill.
What you see above is a real property tax bill.
Daily, I hear from people (both buyers and sellers) confused by property taxes. They see an MLS profile sheet on a certain property that’s dropped 50% in value with property taxes reflecting the previous “value.”
Buyers FREAK out!
I want to help calm you down about Sarasota Real Estate property taxes. In this article, you will discover (in plain English) the process for determining a property’s taxes.
Common questions I hear include the following:
- How are property taxes computed?
- What is Homestead Exemption?
- What “exemptions” are available & who qualifies?
- What is “millage” rate?
- What’s the difference b/t “market value” and “taxable value”?
- Can the County raise property taxes as much as they want?
Please click READ MORE below now for clear answers to these questions and more about property taxes. Your friends will be amazed at your “expert” knowledge once you finish here.
PROPERTY TAXES EXPLAINED IN PLAIN ENGLISH
Sarasota real estate (like nearly all other municipalities) need your property tax money to provide services.
Okay, you already understand that.
You also know you only want to pay as LITTLE as possible.
Once you understand their jargon and the process for determining your specific tax bill, you will forever have peace of mind knowing how each eligible department requests your money.
Real estate taxes (commonly called property taxes) are based on the value of real property, hence the term ad valorem tax (which means according to value).
Property taxes in Florida are levied on a calendar-year basis. Taxes are paid in arrears (that is, at the END of the tax year). Property taxes for the previous year become delinquent on April 1.
Determining “JUST” Value
Property taxes are assessed (aka “levied”) against land and all improvements (that is, a “house” for instance) to the land. Just value is the fair and reasonable value based on objective valuation methods.
NOTE: Just value is NOT just the sales price, as some “lucky” buyers pick up properties well below market value. County will not allow a buyer to pay tax only on “unreasonable” purchase price.
We NEED Your Money!
The amount of property taxes paid to a tax district must come from its tax base. The tax base is the total amount needed to compute a tax rate is the number and type of property tax exemptions granted.
Once the County has its budget in hand, the tax district knows just about what expenses to expect for the next year. The next issue is obtaining sufficient income to support the County’s services.
Tax Breaks Reduce Tax Bill
Your permanent Florida residence entitles you to what is called Homestead Exemption.
NOTE: To be eligible for Homestead Exemption, you must reside in the property & have legal title to the property by January 1. First-time applicants must file an application with the county on or before March 1. Some counties allow you to file any time during the year BUT the exemption will NOT apply until the following year.
Tax breaks include following exemptions:
- Homestead Exemption ~ $25,000
- Additional $500 exemptions: widows & widowers (surviving spouse who has not remarried; legally blind people; non-veterans who are totally disabled
- Disable veterans ~ $5,000
- Age 65 & older ~ additional $25,000 exemption
Add up the applicable exemptions & SUBTRACT from assessed value. You now have the TAXABLE value on which millage rate is applied.
As you see above, property owner Alison Jones qualifies for TWO $25,000 exemptions totaling $50,000 . From her property’s assessed value, Alison’s tax bill will show $50,000 subtracted from assessed value with millage rate applied to her property’s “taxable” value.
Save Our Home “Protection”
Amendment 10 protects home owners from out-of-control property taxes, preventing assessed values from increasing more than 3% per year.
NOTE: Amendment 10 allows a property (when sold) to be RE-assessed at just value as of January 1 of the following year upon change of ownership.
Changes have occurred with property tax rates to allow homeowners to “take their rate” with them if/when they buy another house. Check with your local Tax Appraiser’s office.
What Is “Millage”?
The tax rate is broken down into a “mill,” which is one-thousandth of a dollar (or 1/10th of one cent). There are 1,000 mills in one dollar. Therefore, a tax rateof .010 is expessed as TEN mills.
NOTE: Florida will not allow cities, counties, school boards & fire safety to request more than 10 mills each.
The following example shows a simple formula for understanding the tax rate:
Approved budget MINUS non property tax revenue (churches, municipal buildings, etc) DIVIDED BY Total assessed value MINUS Exemptions EQUALS Tax rate.
Sarasota real estate property taxes will make more sense now. If you want to buy or sell a house in or around Sarasota, Florida, please call me. I want to be your Sarasota Realtor. Take a moment to leave me a comment or question below. If I’ve missed anything, please add your thoughts.
{ 4 comments… read them below or add one }
Hello. I have a question about assessed values. If buy a house for $300,000, and the house is currently assessed at $150,000, will the assessed value be adjusted significantly higher after the sale is recorded, or is there a limit to how much the assessed value can increase after a sale? Thank you for your time and your helpful information.
Great question, Joanna. Recently, a customer asked me a similar question. From the Sarasota County Property Appraiser’s office I received the following:
“The Supreme Court of Florida determined that “fair market value” and “just valuation” should be declared ‘legally synonymous.’ … in turn may be established by the classic formula that it is the amount a “purchaser willing but not obliged to buy, would pay to one willing but not obliged to sell.” (Walter v. Schuler, 176 So. 2d 81 (FL 1965)). On January 1 of each year, County Property Appraiser will determine value of property. From assessed value, applicable exemptions are subtracted in order to determine taxable value from which the current mill rate is applied to create the property’s tax bill.”
Now a couple observations:
1. A property currently assessed at $150,000 may be a property that has been owned for many years by same owner and subject to Amendment 10 (no more than 3% tax increase /year).
2. Assessed value is not market value. Throughout the years, we have compared many, many properties over the years – looking at assessed value versus sales price. In many instances, sales prices are 10-30% HIGHER than County’s assessed values. That’s significant, isn’t it?
I recently had this discussion with a customer who’d researched the County’s property records and was extremely irritated by stiff inconsistencies b/t assessed values and sales prices. On one property he showed me, he noted the following facts – he couldn’t understand the following numbers:
1. Property was listed at $1.3M.
2. County had property assessed at $699,000.
3. Property eventually sold for $924,900.
Seller had owned the property for many years years with homestead. Seller also had done lots of work without modifying the original footprint, increasing the value of the property.
Joanna, does this help?
If you have further questions on this topic, please give the property appraiser’s office a call. They’ve always been very helpful when I’ve called with questions.
Thank you for stopping by. If I can help with anything else, please ask.
Mike
Thanks for this helpful information. My husband and I are putting our home in the Northwest on the market in December 2011 and moving to Sarasota as soon as it sells. I’ve been “house shopping” and have found that Zillow often provides previous year taxes paid. I have two questions regarding property taxes:
1) Zillow doesn’t have tax information on every property, and I don’t know how accurate it is. Is there a web site or other means of finding out the accurate property taxes paid on a home last year (2010) AND/OR the expected property taxes to be paid this year?
2) Many homes in Sarasota have CDD taxes. Included in the description of one of the listings I saw was a statement that the CDDs were “already included in the taxes.” So, what does that mean? If I see a 2010 tax assessment on the property on Zillow (or someplace else) does that INCLUDE the CDD tax or not?
Thank you,
S Molnar
Thank you, S Molnar, for dropping by to ask questions property taxes and CDD. Unfortunately, the big box sites including Zillow do have their limitations.
1. You have 2 choices for tax information: A) you can ask me about tax information on any property or properties or B) you can search Sarasota County property tax information @ http://sarasotataxcollector.governmax.com/collectmax/collect30.asp
2. Regarding your 2nd question, almost ZERO properties in Sarasota have a CDD (aka Community Development District). CDD fees are included in property tax bill each November. During the big real estate development years, real estate developers found they could get their developments (communities) approved faster with the County if they transferred all development fees from municipalities to buyers of property in those neighborhoods. Heritage Harbour (north of Sarasota off SR 64 & I-75 in Bradenton) is one of the biggest and closest communities with a CDD.
Please email, comment here or call me if you have any other questions. Thanks for researching in advance of selling your home. I wish you all the best in selling & relocating to Sarasota. If you would like to work with a real estate when it’s time, please let me know – I’d like to help you.
Mike
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