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Market value of a home is not what property taxes are based on

By ERIC FEICHTHALER - Real Estate Law | Aug 26, 2021

Eric Feichthaler

Dear Mr. Feichthaler:

I received my Truth in Millage statement from the county this week (TRIM Notice), and see the market value increased by $40,000! This is over 15% from last year’s value. I thought we were capped for increases in value for homestead?

— Taylor C.

Dear Taylor,

The TRIM notices were received last week by tens of thousands of property owners in Cape Coral last week. This notice accomplishes many objectives, such as informing property owners of all taxing agencies that plan to impose tax, the maximum tax rate they are proposing, and the date and time of meetings where these taxes will be adopted.

Of course, most people are concerned with the bottom line: what will I owe? As you allude to, the taxable assessed value of the property is the value at which the tax rate is applied from each taxing authority. This assessed value is limited to increases of 3% per year if homesteaded. I have covered the timing and procedure for claiming homestead exemptions in prior columns. These exemptions are then deducted from the assessed value to determine “taxable value,” the amount the tax rate is applied to.

You have referred to the “market value,” which is what the property appraiser estimated your property would sell for to a willing buyer. Keep in mind, these values would be based on last year (2020) sales. We have seen significant increases in values in 2020, and they have continued in the first half of 2021, so I am not surprised to hear your home has gone up 15%, some have gone up even more. The good news: the market value is not what taxes are based on (unless you purchased your home last year). If you have lived in your home for several years, you have been capped every year at 3% (usually lower), so your taxable value may be significantly below market value. For those who have been homesteaded since the recession, these savings can be very substantial.

Lastly, if the market value appears to be significantly higher than you believe is accurate, and you are not homesteaded, an informal call to the property appraiser can often resolve the high valuation. Our property appraiser is excellent at estimating these amounts year after year, but with so many properties that require valuation every year, there are exceptions. The TRIM notice has instructions if you wish to file a formal petition for adjustment of market assessed value.

Hopefully you are homesteaded and the actual taxable value has gone up less than 3%. With reductions in tax rate by some agencies, you may see a tax cut this year!

Eric P. Feichthaler has lived in Cape Coral for over 33 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.