Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: I live in southern Florida in an area that gets hit by hurricanes. If my home were to be damaged, how would that affect my property taxes?
"Real property taxes are not directly affected by hurricane damage," said Jerald S. Beer, partner at Ciklin Lubitz & O’Connell law firm in West Palm Beach, Florida.
But there could be a trickle-down effect.
Say, for example, your home suffers $100,000 of damage during a hurricane this year. Your real estate taxes for 2017 wouldn’t change, said Norman S. Segall, partner of Lubell Rosen law in Coral Gables, Florida.
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That’s because "in Florida, real property taxes are assessed on the value as of the first day of January of the current year," Mr. Beer explained.
But if the damage isn’t repaired by Jan. 1 of the following year, 2018 in this case, "the property appraiser should reduce the value of the home by at least the amount of the damage," Mr. Segall said. This would result in lower property taxes.
If the house is damaged so badly that it must be torn down, "the property appraiser may value the property at land value only—or less because there is a cost to demolish," he said.
If an entire area is devastated by a hurricane or other disasters, homes may be worth less than the cost to repair them because there’d be no market even if the repairs were made, Mr. Segall said.
"A house originally worth $500,000 (land and building) that suffers $100,000 in damage may not be worth $400,000 because so many properties are for sale or have been taken over by insurance companies," he explained.
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Tax assessments typically come out between July and August of the year being assessed, Mr. Beer said. If you disagree with the proposed assessment, you can request an informal conference with the property appraiser before it becomes final in late October or early November. "A good portion of disputes get settled without needing to file a formal claim," he said.
If you’d still like to initiate a formal claim, keep in mind that you have a short period of time, less than a month after the assessment, to petition the local Value Adjustment Board or file a lawsuit in Circuit Court, or both, Mr. Beer said.
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