The Miami Herald ran an article last Sunday about property taxes and since I had just received my proposed tax bill, I pulled it out to take a look and I was surprised with what I found. I’ll explain more on that later. But if you’re a homeowner, you also received this notice and like most other residents of Dade County, you probably have questions! For some, your taxes are going up next year and you’re probably puzzled by it since property values have dropped so much in the past few years. And for others, your taxes are going down because of these drops in property values. So why are some people paying more, while others pay less?
Two factors determine your property taxes: the assessed value of the home, and your local millage rate. The assessed value is SET when you buy your home, roughly determined by the price you pay, and this can fluctuate depending on the market. Since 1992, Save Our Homes has been in effect, protecting people with homestead exemptions by ensuring property taxes & assessed values are not increased by more than 3% each year. Until about 2006, homeowners were seeing great appreciation in their market values, but they were being protected against their tax levels inflating at the same rate.
On the other hand, people who bought during the bubble are seeing their homes lose value, so their original assessments were significantly higher than today’s assessment. Therefore, their annual taxes have been on the decline ever since the bubble burst. As their market values decrease, their assessed values are decreasing at the same rate.
So take my home for example. Based on my proposed tax bill, my market value decreased this year by $136,530. But my assessed value increased by $18,206 which represents 2.7% in value, obviously close to that 3% cap that they can’t exceed. Until my assessed value and market value reach the same number, my property taxes will continue to rise year after year. So here’s the answer to the always nagging question – why are my taxes going UP while my neighbor’s are going DOWN!
For help with any of your real estate needs or with questions, please don’t hesitate to contact me at [email protected] or 305-798-8685.