Property Tax Question (Miami, Rio: for sale, real estate, renting)

[hbrulay]

I'm looking at some Real Estate (short sale) and the listing indicates $20K/year in property tax. However, the sale price in now $725K. The owner paid $1.1M. Will property taxes be adjusted based on new sales price? And if so, should i calculate between 1.5 and 2% of sales price?

[planetsurf]

Ahhh, taxes.
I believe almost everywhere in Dade county the millage rate is closer to 2.1-2.2%.

Here's the tricky part. IF this sale is comparable to others in the area (because all other sales are dropping too) then you should be able to be taxed on the $725k.
IF, however, the comparables are closer to the original price (b/c you're getting a "steal"), then the county will usually give some discount, but mark the tax rate at closer to the comparables.

You can always fight the assesmant -- but if you're the first of MANY to buy at that lower rate will you get the lower price?? Don't know, maybe.

I am NOT a tax lawyer, this all just an educated answer.
Remember, taxes are forever on this property, so I would seriously suggest a consulatation with a lawyer.

Good luck.

[jbravo]

Adding to planetsurf:

And it will not apply until next years tax assessments.
By the way the taxes assessments are out (Nov 1)
Go to:
Miami-Dade County - Property Appraiser
and you will see this years taxes, there's nothing to be done for those no matter at what price you buy.
The 2% you asked about earlier is a ballpark given for new construction.

I also wish you good luck.

p.s.
Here's all the mills:
http://www.miamidade.gov/pa/library/2008%20ADOPTED%20MILLAGES.pdf (broken link)

[spyderman33]

I was asking that same question to a tax atty and he said that 99% chance that the taxes will NOT be adjusted accordingly... It will probably hover around that $20K mark... The County is quick to raise your taxes but will be super adverse to lowering them.. I would calculate the taxes as $20K/ year and if it turns out to be lower, BE HAPPY...

[hbrulay]

Originally Posted by spyderman33

I was asking that same question to a tax atty and he said that 99% chance that the taxes will NOT be adjusted accordingly... It will probably hover around that $20K mark... The County is quick to raise your taxes but will be super adverse to lowering them.. I would calculate the taxes as $20K/ year and if it turns out to be lower, BE HAPPY...

Thanks all for some great advice.... So, given the high probability of taxes not being adjusted downward, it would seem more advantagous to find a home for sale that was previously purchased prior to the 2002-2007 R.E. bubble in order to get a lower tax bill based on a much lower sale price? Would this be a correct assumption?

[planetsurf]

Maybe? You're talking about maybe thousands of $$ a year.

FWIW, we bought VERY low in 99, lived there for 4 years before renting it out when we were moved to SoCal. We lost our SOH, and our taxes grew as the value shot up between 03-07.
THIS YEAR they lowered our valuation (and hence taxes) by ~$75k without us doing ANYTHING. (We "homesteaded" after the March cut-off.)


If you find a previously homesteaded property with VERY low taxes -- say taxed at ~$200k -- buy it at ~$600k and the comps are $700k, they may still want to value the property at $700k. They certainly won't value less than $600k.
If you purchase that home at $600k and the comps are $600k, then I think you'll probably be taxed at $600k, even if the value of the home MAY have been $700k in 06/07 - theoretically.

I would SERIOUSLY consult an attorney, a mistake here doesn't just cost a few thousand $$ this year, but every year you own the house.

[Nav]

Taxes are calculated at the property Appraiser's market valuation of the property, not what was actually paid by the buyer. This is to prevent someone from selling a 1 million dollar home to his brother for 50k and getting taxed on just 50k. The only thing that will reduce the tax liability is the the absolute repression of the surrounding neighborhood. All neighboring houses must be sold at values substantially below the county's appraised value. One or two houses wont do it. It must be more than half, all which must have sold recently. Typically the county's taxable value is below the market value for the property so this is not likely to happen.
If you try to protest with the county, they will start with the phrase "can the subject house, or one of similar size and location be sold in the market for the county's taxable value". If the answer is yes, you have lost the appeal. (They can even specify a 1+ mile radius from the house for their justification)

Be careful, like it was said earlier, Taxes will kill you if you are not careful.

Nav