Assessor uncovers windfall in taxes
Owners owe $1 million for improper breaks
Posted September 4 2005
From a luxurious waterfront home off Las Olas Boulevard to older suburban condos, the Broward County Property Appraiser's Office has begun filing more than $1 million in liens against property owners they accuse of improperly receiving homestead tax breaks.
Some of the 150-plus people face taxes and penalties totaling more than $20,000 based on Property Appraiser Lori Parrish's crackdown of possible fraud over the past seven months. The bills are in addition to the loss of their lucrative homestead exemption, which limits how much the taxable value of the home can increase each year.
A team of investigators working for Parrish uncovered people who claimed homestead exemptions to reduce taxes on vacation homes and rental property and others using exemptions granted to dead relatives. At first, the work largely relied on tips from neighbors but has begun moving into a new phase in which investigators cross-check tax records with utility bills to root out those who have homestead exemptions on places where they don't really live.
Pilot projects, concluded over the past month using the utility bills for Margate and Weston, have added $25 million to the county tax roll. Parrish now intends to turn her attention to Fort Lauderdale, Pompano Beach, Coral Springs, Tamarac, Miramar and Pembroke Pines.
"We're trying to make sure everything is fair and equitable and correct and that includes finding anyone who is cheating the system," Parrish said. "Property taxes are a fortune, and everyone should pay their fair share. When someone isn't paying their fair share, others are paying more than they should."
According to letters Parrish's office began mailing out last week, the property owners losing their homestead exemption will have until Oct. 3 to pay the back-taxes and penalties before a lien is formally filed against their home. While they can appeal the loss of the tax break to the county Value Adjustment Board, the only place to dispute a lien is in a courtroom.
State law allows the county to go back 10 years in assessing back-taxes as well as charge a 50 percent penalty and a 15 percent interest rate. In one instance of a $400,000 home in Fort Lauderdale's Progresso neighborhood, those penalties raise a bill for $19,000 in back-taxes to more than $37,000
Homestead exemptions are available only to Florida residents on their primary residence. They have become increasingly prized because of the rapid increases in property values in the area in recent years that otherwise would have sent the person's tax bill skyrocketing.
Among the properties that liens are being placed against are $284,000 high-rise condo on Pompano Beach's shore where the owner owes $28,000 in taxes and penalties, a $650,000 home on Coral Springs' Leitner Drive where the owner owes $19,000 and an $81,000 home in Fort Lauderdale's Middle River area where the owner owes $22,000.
Another person receiving notice of a tax lien is Michelle Ledgister. She is the Maryland woman accused of threatening to send Parrish's office anthrax because of the questions about her homestead exemption. The lien on her Parkland home will be for $3,767.
Some of those losing their homestead exemptions have accused Parrish's office of being overly aggressive in trying to eliminate fraud and mistakes. Others hold out hope that they can still convince Parrish's investigators that they deserve the tax break.
Dale Jones is being notified that he owes $23,000 on his $1 million home on Coral Way in Fort Lauderdale. Parrish's investigators removed his homestead exemption and back-taxed him after discovering the house listed for rent as a "Tahitian Island Paradise" on a luxury home rental Web site.
Jones said he briefly rented the home last year while traveling back and forth to Alabama to help his ailing father. He said county officials had assured him a short-term rental was allowable as long as the place remained his main residence for most of the year.
"I want to abide by the law and thought I was abiding by the law when I rented it," Jones said. "I didn't think my dad would live very long and rented it for a short period. This is my home, and I love this home."
More than $200,000 in the back-taxes and penalties comes from the pilot project reviewing Margate's utility bills. The amount from Weston is still being calculated.
Ron Cacciatore, a former high-ranking officer at the Broward Sheriff's Office who is leading Parrish's investigative team, said his group compared records to find instances where the utility bill was being sent to someone other than the property owner or to a different address than that of the property in question.
They found 1,300 examples of such suspect records in Margate and almost 800 more in Weston. About a quarter turned out to be cases where the house was being rented or was a second home of someone who lived elsewhere most of the time, Cacciatore said.
Weston City Manager John Flint said he was extremely pleased with the effort by Parrish's office. He said the city had no specific suspicions beforehand of homestead abuse, but he had believed that there was a good chance of problems given the large number of properties. The extra $13 million in property value generated by removing invalid homestead break boasts the city's current $6.6 billion tax roll.
Cacciatore expects to eventually review the utility bills for all Broward cities. That work could take several years to complete.
"This is just the tip of the iceberg because we are just getting started," Cacciatore said. "There are going to be a lot of unhappy people, but why should hard-working taxpayers subsidize those who are trying to cheat the system?"