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Assessed Value and Florida Property Tax

In a previous blog posting, we explained what the fair market value (FMV) of your property meant and the general techniques used to derive the FMV of your home. We buy houses Orlando and all through Florida; in order to help you sell yours, we will be looking at another process of valuing your property called the assessed value. The assessed value is an important concept to understand for all Florida homeowners as it has a direct correlation to how much property tax you end up paying. Understandably, if the general upkeep and expenses like property tax of your home are currently unaffordable during these trying times, Your Trusted Home Buyer is your number one choice to help you out. If you are planning to downsize to a home with lower property tax rates, selling your home to Your Trusted Home Buyer gives you the benefits of a fair cash offer and to close in as little as seven days. We are local professional home buyers and provide our services in 20+ Florida areas. Learn more about us here, and get a fair cash offer on your property in five minutes!

 Assessed Value in Florida

The assessed value of a property is the dollar value, assigned to a property to calculate its property tax or ad valorem tax. In Florida, local governments collect property tax, and a municipal property assessor is responsible for conducting assessments to determine the taxable value of each property in each region annually. Generally, the information that is considered during assessments is like ones used in property appraisals including market conditions, comparable quantities, income from the property, physical improvements, utilities, etc. 

The assessed value is a uniform percentage of the market value or appraised value of the home. Hence, the assessed value is typically lower than these two figures. This uniform percentage is also called the assessment ratio. There is a multitude of factors that determine the assessed ratio, often government bodies use an algorithm based on real estate data in the neighborhood and surrounding areas. The final assessed value is multiplied by a quantity called the Millage Rate, to determine the final taxable amount. The millage rate is the taxable amount due for every $1000 of the assessed value. The assessed ratio and millage rates are both determined by local tax judiciaries and can vary greatly across Florida regions, more distressed areas will tend to experience lower ratios, and naturally more economically developed areas will have higher values. 

Florida and Property tax

  • Property Tax= Value*Assessment Ratio*Millage Rate 
  • Value*Assessment Ratio less all tax exemptions are the final taxable value

This can be a little confusing so consider this example. Suppose that you think, “I need to sell my house Orlando” but it has a market value of $200000 and post-assessment the assessment ratio is determined at 80%.  In this case, your assessed value would be $160,000 and this would be the tax basis for your home. Subtract any tax exemptions from $160,000 and multiply to the millage rate to find the payable property tax.

Every August, Truth in Millage (TRIM) releases the final taxable value of your home starting from January of the next year. This document also breaks down the tax rates for your city and nearby districts. If you are unhappy with your final assessed value, you may appeal for re-assessment. 

Florida Tax Exemptions

There are several tax exemptions you may be eligible for to exempt yourself or lower your property tax: 

  1. Save our Home (SOH) Florida Amendment:
  2. For homestead properties, the SOH amendment caps the rate at which the assessed value of a home can grow at a maximum of 3% each year. For non-homestead properties, the cap is at 10%
  1. Widow(er) Exemptions: 
  2. $500 exemption for widowers or widows who have not remarried
  1. Legally Blind Exemption
  2. $500 exemption for those proven as legally blind
  1. Permanent or Total Disability Exemption
  1. Veterans Exemption

We hope this post has helped you to gain additional insight into what assessed value is and what implications it has on your property tax bill. 

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