Broward tax notices bring little relief for some property owners
August 24, 2007
Property owners across Broward County began learning this week how much they will save because of state-mandated tax relief, and some are far from happy.
The disappointment over the size of tax cuts is coupled with confusion about how property values used to calculate taxes went up when sales prices have gone down.
Property Appraiser Lori Parrish will finish mailing out more than 800,000 tax notices today and is already being deluged with calls and e-mails. She says misunderstanding and questions are rife because of the tumultuous real estate market and complex tax law changes.
Coconut Creek resident and landlord Jeff Merlin won't see any savings on a condo he rents out. Because its assessed value jumped 30 percent, he will pay $300 more in taxes.
"Nothing in this county has gone up 30 percent in value," Merlin said. "What I see happening is the county raised assessments to compensate for rate cuts. They made sure their tax revenue stayed the same."
To address questions from the public, Parrish has revamped her Web site, taken over the phone bank at the county's emergency operations center and will keep her office open weekends.
"There is a lot more to explain this year, and the answers aren't simple," she said.
Under the legislation that Gov. Charlie Crist signed this summer, local governments must roll back their tax rates. The size of the cuts depends on how much extra revenue they reaped during Florida's real estate boom, but the average savings for homeowners statewide is expected to be $174.
The notices from Parrish's office detail the proposed tax rates for each local government, how much her staff assessed the individual property as worth last year compared with the previous year and what the potential tax bill is. Residents have until mid-September to protest their new property values and will receive their actual tax bills in November once governments finalize their tax rates.
Despite the state legislation, taxes are not necessarily going down.
Some cities, including Lauderdale Lakes, North Lauderdale and Lauderdale-by-the-Sea, are considering invoking an opt-out clause in the tax-relief plan. By a super-majority vote of their governing boards, they can ignore the required cutbacks.
And while the state Legislature cut taxes to be paid to cities and counties, it increased property taxes that pay for public schools — about a third of most tax bills. Also, some governments are increasing other fees, including the assessment for fire protection.
Sidney Margles, a Canadian snowbird who tried to organize out-of-state property owners to fight for tax relief, found that catch when he opened his tax bill. Although the taxes on his Century Village condo are dropping from $2,982 to $2,730, Deerfield Beach plans to increase his fire assessment from $64 to $99.
"It's a dishonest way to get the funds that they think they need," Margles said. "The relief is not as high as the state indicated we could expect."
Also thwarting greater tax relief is what has happened with property values.
Property values increased an average of 10 percent in Broward last year, helping increase the taxable value of all property in the county from $157.4 billion to $176.4 billion. Although sales slowed last year, Parrish and her appraisal staff said prices in most of the county did not fall until this year.
Thus, the current real estate downturn won't be reflected in tax assessments until next year. Parrish said sales data for the first five months of 2007 show the average value of single-family homes declining 4 percent and average condo values declining 2 percent.
There also is a quirk in the state Save Our Homes law that comes into play in a real estate downturn.
Save Our Homes prevents the taxable value of a person's home from increasing more than 3 percent a year. Large portions of residents' home values became exempt from taxation during the years when real estate prices soared annually by double-digit percentages.
But now, a home's market value could decline and its taxable value still increase. The Save Our Homes quirk means the taxable value of a home will increase at up to 3 percent a year until it comes in line with the market value.
That's what happened to Janelle Rosenfeld, of Pompano Beach.
Her home's market value declined from $843,000 to $835,000. But the value used to assess her taxes crept up from $562,000 to $577,000. She will pay less in taxes than she did last year, but her savings will not be as great as if her home's assessed value had dropped like the market value did.
"I do not understand logically how when market value goes down your assessed value can go up," she said. "As a homeowner if I want to sell my home, I'd be selling for less."
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