Fourth-quarter property tax strategies could help lower next year’s bills
If you’re like most property owners, you’ve already received, read and wept over your 2008 tax bill. Although it’s too late to do anything about this year’s bill, it’s never too soon to be proactive about your property’s assessed value and examine whether the assessment is accurate. If it’s not, the fourth quarter is one of the best times to conduct a property tax checkup.
n Nov. 1: Property tax bills are mailed the first week of November, so if you haven’t received yours by now, it may be because you didn’t report an address change to the property appraiser. To obtain the amount of your 2008 tax, visit the tax collector’s Web site (www.leetc.com) and enter your name, property address or the STRAP number. If your address is incorrect, promptly notify both the tax collector and the property appraiser (www.leepa.org) using their online address change systems.
Tip: The failure to receive a tax bill is not a legally recognized excuse for not paying property taxes. Therefore, be sure that all property deeds contain your correct mailing address.
n Nov. 30: This is the last day that Florida property owners can receive the maximum 4% discount on their tax bill. After Nov.30, discounts drop by 1% per month (3% in December, etc.) until the end of March, when full payment is due. Taxes for 2008 become delinquent if not paid by March 31, 2009; tax certificates are sold in mid-May if the taxes, interest and penalties are not paid in full.
Tip: Most property owners who itemize deductions for federal income tax purposes will want to pay this year’s property taxes by Dec. 31, so they can use the write-off when they file their 2008 return.
n Dec. 12: The fastest, most cost effective way to challenge a property tax assessment is by filing an administrative appeal to the local Value Adjustment Board (VAB). However, in Lee County, the filing deadline has come and gone; it is always 25 days after the TRIM Notice mailing date.
The only exception is for property owners who received a revised TRIM Notice. They have 25 days from the mailing date of their revised notice to file. Otherwise, property owners who did not file a VAB petition but still wish to contest their 2008 assessment have until Dec. 12 to file a Circuit Court tax appeal.
Tip: Contact your property tax attorney before December 12 if you’re considering litigating your entitlement to a property tax reduction.
n Jan. 1: By law in Florida, Jan. 1 is when a property’s assessment status is determined for the entire year. Key issues include: entitlement to agricultural classifications; qualification for homestead exemptions, Save Our Homes and portability; and determination of whether new construction is “substantially completed.”
If a building is deemed substantially completed as of Jan. 1, its value is assessed (along with the land value) on the tax roll. If not, the property is assessed as “land value only” for that year and will be reviewed again the following Jan. 1.
Tip: Typically, the Lee County Property Appraiser judges a building to be substantially completed once a certificate of occupancy or certificate of completion is issued. But because this can be a complex issue, it’s best to contact a real estate attorney for specific advice.
n Other 1st Quarter Deadlines: January 1 is also relevant to owners of properties that may qualify for tax-reducing exemptions.
Agricultural. There are potentially enormous property tax savings for an owner of vacant land that qualifies for an agricultural classification (a.k.a. “agricultural exemption”). That’s because the vacant land is assessed at a value based upon the income generated by its agricultural use, rather than its market value.
For an owner to qualify, agricultural use must be occurring on their land as of Jan. 1 in accordance with strict guidelines. These forms are available at the Property Appraiser’s office or online at www.leepa.org.
Homestead. The homestead exemption entitles a residential owner to a $50,000 assessed value exemption on their property (prior to tax year 2008 it was a $25,000 exemption), resulting in savings of about $640. To qualify, an owner must have title to the property before Jan. 1 and occupy it as their primary or permanent residence. Establishing primary residency generally requires termination of non-Florida residency and possession of a local voter’s registration, Florida driver’s license and Florida license tag.
Qualified homesteaders are automatically enrolled in the Save Our Homes (SOH) program, which limits annual property assessment increases to 3% or the rate of inflation, whichever is less. Also, SOH is portable effective 2008.
Tip: Property owners have just a two-month window to apply for Agricultural and Homestead exemptions, from January 1 through the end of February.
(My thanks to real estate attorney Mike Hagen of TaxCuts1 in Fort Myers for his assistance with this article. For more information, please contact him at info@mikehagen.com or visit www.TaxCuts1.com).
Gary Tasman is executive director of Cushman & Wakefield’s Southwest Florida office. For more information, please contact him at (239) 489-3600 or gary.tasman@cushwake.com.