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Old 10-19-2010, 09:09 PM
 
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How do property taxes work in miami? What does the homestead exemption mean, and how can I "lock in the value of the property?"
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Old 10-20-2010, 02:54 AM
 
Location: western East Roman Empire
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Property taxes work in Miami like they work in most other places: the bureaucrats and politicians who administer them steal them for the most part and provide a few services in return.

Having said that, the property tax rate is roughly 2.1% (it may vary from municipality to municipality). That 2.1% is applied to assessed value, i.e. the property appraiser's estimate of what the property is worth on the market that year for tax purposes (usually a bit below actual market prices, though the market is volatile on the downside right now).

The homestead exemption means that the tax office will deduct up to $50,000 from the assessed value when determining the final tax bill.

For example, assessed value in 2010 $250,000 @ 2.1% would be $5,250 in property tax that year. But with $50,000 homestead exemption $250,000 - $50,000 = $200,000 @ 2.1% = $4,200.

You cannot "lock in" the value of a property. The homestead exemption also allows for a 3% yearly cap on the increase in property tax, even if market and assessed value go up by more than 3%.

What most people do not understand is that property tax may go up in a particular year even with the 3% cap and even when market prices are falling, especially after a period of sharp increases in market prices. After all, 3% is not nothing, it is 3%. On top of that, the taxing authorities can raise the tax rate.

There is also something called "portability". Basically, by some complicated formula, you enjoy some kind of property tax break if you live in a homesteaded property with a certain value for a certain period of time and then you upgrade to a more expensive property.

Hope this helps.
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