Florida has received a lot of attention lately for the rising home owner’s insurance costs but don’t forget the property taxes. In Florida, property taxes are ad valorem taxes, meaning they are determined based on the assessed value of a property. Although Florida has been known as a more affordable state when it comes to property tax, the rates are on the rise.

When a homeowner possesses a property, they receive an annual tax bill from the local tax authority. This bill is calculated as a percentage of the property’s assessed value, which is determined by considering factors such as the value of comparable properties in the vicinity and any enhancements made to the home since its acquisition. Additionally, the assessed value may incorporate various property attributes like location, size, condition, materials, square footage, year built, etc.

Property Assessment in Florida

In Florida, the responsibility for assessing the value lies with the county’s appraiser, and assessments are subject to annual reassessment.

All real property in Florida is required to be assessed at just value, which aligns with the fair and reasonable value determined by objective valuation methods, akin to market value according to Florida courts.

Property appraisers use three distinct approaches to determine value: the sales comparison approach, the cost approach, and the income approach.

Regarding the imposition of property taxes, it is essential to note that, according to the U.S. Constitution, the federal government cannot tax real property. Instead, this right is granted to states and local governments. In Florida, real property is solely taxed at the local level by cities, counties, school boards, and special tax districts. The revenue generated from property taxes supports various municipal services, including fire control, police, schools, roads, and local health initiatives. Given the absence of state income tax in Florida, property taxes play a crucial role as a revenue source.

Primary tax districts include cities, counties, and school boards, while special tax districts encompass entities such as fire control districts and flood control districts. These districts formulate an annual budget to cover operating expenses and rely on property taxes to fund these requirements. In addition to property taxes, they may explore other revenue sources, such as federal grants, court fines, and parking meter income.

Some homeowners may also be subject to taxes imposed by community development districts (CDDs). CDDs have the authority to levy assessments on property owners to finance infrastructure and community projects. Property owners within a CDD are informed about potential additional taxes through a disclosure, giving them the opportunity to make an informed decision.

In Florida, property taxes are collected based on the calendar year, with payments made in arrears for the period of January 1 to December 31. Property owners can initiate payments from November 1, opting for either four installments or a lump-sum payment. Those who pay before March 1 are eligible for a discount, while full payments are required from March 1 to April 1. Unpaid property taxes after April 1 are considered delinquent.

Property Tax Exemptions in Florida

Certain individuals are eligible for exemptions that relieve them from paying some or all of their property taxes. These exemptions apply under specific and defined circumstances.

Immune Properties

Immune properties include city, county, state, and federal government properties, such as county courthouses and military facilities. These properties are not assessed, and their owners are exempt from property tax payments. Additionally, certain “special properties” may also be granted immunity through specific legal provisions. Think of these immune properties as being impervious to property taxes, akin to how someone immune to chicken pox remains unaffected. Immune properties are not susceptible to the property tax “virus.”

Exempt Properties

Exempt properties are those owned by churches and nonprofits. While these properties may fall within the tax jurisdiction, the property owner is not obliged to pay property taxes.

Partially Exempt Properties

Partially exempt properties are still subject to property taxes, but the property owner receives partial relief from the obligation to pay the full amount. For example, property owners who qualify for a homestead exemption enjoy a partial tax exemption.

Florida’s Greenbelt Law Protects Farmers

Enacted in 1959, this law was instituted with the primary objective of shielding farmers from unwarranted tax hikes. The rationale behind it is this: as urban development expanded, agricultural land became an increasingly attractive target for potential development and subdivision. Consequently, the assessed value of such land could skyrocket, leading to elevated property taxes.

To counteract this issue, the Greenbelt Law was enacted, ensuring that farmland is assessed solely based on its existing character and use, without factoring in any future potential uses, such as commercial development. By obtaining an agricultural land classification, the property receives a reduced assessment, consequently leading to lower property taxes.