Miami-Dade Real Estate Tax Amount Determination (Miami Beach, North Miami: comparable sales, sales, condo)

[jr8999]

I am hoping to get some input from the real estate aficionados.

I am in the process of potentially purchasing a condo in Coral Gables. I am trying to determine my estimated property taxes. I went to the miamidade.gov site to use the tax estimator functionality. It states the first step as "Enter the Estimated Property Sale Price or Market Value".

My question is: When a property is sold is the sale price always used as the basis for the buyer to calculated the real estate taxes or is market or assessed value ever considered? I believe the current owner's taxes are based on assessed value. If the sale price is used the taxes would be approximately 50% higher than the current owner is paying even when applying homestead exemptions. This does not seem possible to me. Any input would be greatly appreciated.

Also... How does the "Save our Home Cap (Amendment 10)" affect this change in RE tax if at all?

[bale002]

Originally Posted by jr8999

Any input would be greatly appreciated.

Personally my rule of thumb is to budget 2% of purchase price for the annual property tax, with 3% increments each year, and if I have to be more precise than that on the downside and quibble and split hairs about it, then I cannot afford the property.

The actual number is the result of a rather complex formula in which purchase price is only one variable and it usually comes to less than 2% of purchase price, though I would rather overestimate expenses than underestimate them.

Maybe Marc and some other regulars on this forum can give you the precise formula, but I believe that comparable sales are also a significant variable, such that if you pay more than average in the pool of comparables your assessed value will be closer to that average and not the actual purchase price.

But, again, I would budget 2% of purchase price and then perhaps be pleasantly surprised in the event.

By the way, the entire annual property tax is issued on November 1st and if you pay it all in one shot by a certain date you enjoy a noticeable discount. There is also a way to pay estimated property taxes quarterly in advance of November 1st for an even greater discount.

Hope this helps.

Good Luck!

[Marc Middleton]

Originally Posted by bale002

Personally my rule of thumb is to budget 2% of purchase price for the annual property tax, with 3% increments each year, and if I have to be more precise than that on the downside and quibble and split hairs about it, then I cannot afford the property.

The actual number is the result of a rather complex formula in which purchase price is only one variable and it usually comes to less than 2% of purchase price, though I would rather overestimate expenses than underestimate them.

Maybe Marc and some other regulars on this forum can give you the precise formula, but I believe that comparable sales are also a significant variable, such that if you pay more than average in the pool of comparables your assessed value will be closer to that average and not the actual purchase price.

But, again, I would budget 2% of purchase price and then perhaps be pleasantly surprised in the event.

This has been covered many times on here and what Bale is saying is pretty close. 2% for investors and 1.6% or 1.7% usually for homestead property owners of the sales price.

What the current owner is paying is irrelevant. If you're already a homestead property owner, you can transfer some of your SOH savings to your new home so you don't have such an increase.

So if you're buying a $500k condo in the Gables and you plan to live there most of the year, expect about $7500-$8000/year in taxes and $9k-$10k if its for investment/rental purposes.

[jr8999]

Thanks for the info. Sorry that it's been covered so much in the past. I should have done some searches.

In my case there is no homestead transfer but I will be living in it for the majority of the year. I'm finding out there is a significant tax difference between one for 500k and one for 750k. Granted there are differences between the two in the northeast but definitely not as wide a spread. I guess high property taxes are to be expected in a "tax free" state.

[jr8999]

The other difference that comes to mind between the N.E. and FL is that home assessments for the purposes of real estate tax valuation do not change from a seller to buyer when the property is sold.

[Marc Middleton]

Originally Posted by jr8999

I guess high property taxes are to be expected in a "tax free" state.

With our deductions, Florida actually ranks in the middle of the country for property taxes. And much lower than high tax states.

Miami's taxes are a bit higher than our cities in the state - Naples has lower taxes (collier) but cross the border and Lee county (ft myers/Bonita Springs) has higher taxes than Naples (but still less than Miami).

Also in Miami there are so many 'cities' so for instance, Coral Gables or North Miami has higher taxes than a home inside city of Miami. Even Miami Beach has a lower 'millage' rate than North Miami.

[oronzous]

right. Cities with a decent revenue from business and commercial licenses are able to offer lower millage to residential owners.

[Stoptothink]

Originally Posted by jr8999

The other difference that comes to mind between the N.E. and FL is that home assessments for the purposes of real estate tax valuation do not change from a seller to buyer when the property is sold.

They don’t? So, if you bought a condo for appreciably higher than the county assessment, your taxes will not go up? Is that true?

[jr8999]

Originally Posted by Stoptothink

They don’t? So, if you bought a condo for appreciably higher than the county assessment, your taxes will not go up? Is that true?

True. In Massachusetts for instance the city/town assessors set the property values. Those values do not change when the property is sold. The new owner pays their real estate taxes based on the same assessment as the seller. Periodically (in many cases annually) the municipality will review all assessments and take action as to whether they need to change. Assessments may also change as an addition/renovation increases the value which is triggered by pulling a building permit. For the most part the assessments are well below current market rate. Millage rates are also reviewed annually for the most part. So property taxes definitely do increase but they are not directly triggered by the sale of the poperty.

[Stoptothink]

Originally Posted by jr8999

True. In Massachusetts for instance the city/town assessors set the property values. Those values do not change when the property is sold. The new owner pays their real estate taxes based on the same assessment as the seller. Periodically the municipality will review all assessments and take action as to whether they need to change. Assessments may also change as an addition/renovation increases the value which is triggered by pulling a building permit.

Understand. But I was asking about a Florida condo...