Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: I'm thinking about buying a home in Palm Beach, Florida, but I hear they may raise property taxes. How will that impact me?
A: Palm Beach County’s effective tax rate—1.26%—is the third-highest in Florida, according to an April 2018 report by ATTOM Data Solutions. Average property taxes were $5,386, the report said.
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But taxes in the municipalities within the county could be higher, said Leslie Evans of Leslie Robert Evans & Associates in Palm Beach, Florida. Each area is entitled to ask taxpayers for more to pay for special initiatives, and rates can be as high as 1.8% or 2%, he said.
And although the county voted earlier this month not to change its property tax rate for 2019, that doesn’t mean Palm Beach residents will see the same number on their tax bill in the coming year. With so much new construction going up in the area, property values are rising, so homeowners are on the hook for more.
"The rate may not go up, but the valuation can go up," Mr. Evans said.
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The yearly increase in taxable property value is capped at 10%. For those who are ready to declare Florida home, the state’s homestead exemption can help defray costs. With the exemption, the increase to assessed value of the property is capped at 3%.
When buying a new home, it might be hard to argue a tax assessment. As part of a strategy to lower taxes from the beginning, Mr. Evans suggests deducting broker’s fees and other closing costs from the value of the home so its appraised for less. And as the years go by, homeowners can challenge changes to the valuation.
The tax assessments generally come out in late summer, according to Jerald S. Beer, a partner at the Ciklin Lubitz & O’Connell law firm in West Palm Beach, Florida. If a homeowner thinks the number is off, he or she can have an informal meeting with a property appraiser before the valuation becomes final later in the year. He said many issues are settled without formal claims.
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The Palm Beach County School District has proposed an additional property tax to help fund its public schools, the Sun Sentinel reported Wednesday night after the school board approved the measure. The tax would add $1 of tax for every $1,000 of taxable property, and the funds would be earmarked to improve school security and mental health care, as well as teacher salaries, according to a statement from the district. Residents will be asked to vote on the measure in November.