I am looking at homes in Vero Beach. With property values being so low, if I buy a house that has established

Asked by Jeff, Vero Beach, FL Mon Mar 9, 2009

property tax that was set with purchase/value of substantially more, can i expect to pay an appropriate tax based on current value/purchase amount ?...or how would I file for review and what are chances of success ?

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Sally Daley, Agent, Vero Beach, FL
Sat Mar 14, 2009
BEST ANSWER
Hi Jeff: with values declining, it is not unusual for buyers to end up paying less for property taxes than the previous owner, but also depends on how long the Seller owned the property. and whether or not it enjoyed homestead protection to keep tax increases to a cap of 3% annually.
Keep in mind that your taxes would be based upon the assessed value times the set mil rate, not the market value of the property. Theoretically the assessed value (AV) of a property is supposed to equal 80% of market value, but in a declining market, recent sales are often selling at or below the established assessed value of a property because our taxes in Indian River County run in arrears so the assessment is always catching up to current market conditions. If you purchase a home previously assessed for substantially more than your purchase price, your tax bill should decrease, eventually. In the Fall, County officials send out 'trim' notices to homeowners in advance of tax bill issuance that advises homeowners of their properties' specific AV, mil rate and anticpated tax bill with pending budgets. After receipt of the trim notices, there's an established time in which owners can file appeal paperwork and fees (nominal) to undergo a review of assessment in an effort to reduce property taxes. When the appeal is based simply on declining values by a homeonwer whose remained in a home but feels overtaxed, the case for appeal is less certain; but when the appeal is based on declining values based on the reality of a sale in which you were the buyer and set the market value by virtue of your purchae price, it is difficult to say that the value decline is not real, with assessment reduction far more probable.
Another key factor in future tax rates is whether you qualify for a single of joint homestead exemption: owners living in the State six months and one day can file for homestead exemption that takes either $25K singly or $50K jointly off your tax assessment; more important, your property then goes under the protective cap of the Save our Homes amendment to our state constitution that mandates tax increases (or decreases, such as in this market) cannot exceed 3% per year.
Our tax assessor's staff is great, I have always found them to be extremely helpful, don't hesitate to contact them or search their web site ircpa.org -- the tricky part of your question is having a tax assessment period that is in arrears catch up with a real time sale in a declining market.
So don't let a current tax bill of a present seller be a deterrent to your pursuit of the property should it be right for your needs as your purchase scenario, not the Seller's will dictate your future tax liability.
Now go out there and become a bold buyer who seizes the market and makes it his! Good luck and don't hestitate to contact me if you'd like any ideas on properties fitting your wish list I'd rate BUY.
0 votes
John Bennett, Agent, Orlando, FL
Thu Nov 5, 2009
I think i don't understand "Theoretically the assessed value (AV) of a property is supposed to equal 80% of market value, " Maybe this is something only IRC does but State Law (193.011) (193.122 ) seems to do this differently.

Maybe Ms. Daley and help us understand the 80% of AV works. I would hope our county could get the same.

John
0 votes
Paul Kitchen, Agent, Vero Beach, FL
Tue Mar 17, 2009
Check out our Vero Wiki for answers to common property tax questions...
0 votes
John Bennett, Agent, Orlando, FL
Mon Mar 9, 2009
Hey Jeff,
I don't work Vero area but Deborah and Robert below does.

The Property Appraiser will not value your home according to what you pay, but rather what the Market value is. If you pay 100,000 and market value is 75,000 - you will pay on the 75,000

If you pay 75,000 and fair market is 100,000 you will pay on the 100,000

You can alway try.

John
0 votes
Deb & Bob de…, Agent, Vero Beach, FL
Mon Mar 9, 2009
Dear Jeff,

The answers to your questions should be addressed by the Indian River County Property Appraiser. 772-567-8000.

I can help you find the right home at the right price.

Deborah deMontigny, Broker/Associate
Accredited Buyers Represenative
RE/MAX Premier Property Showcase
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