Taxes on the rise? (Homestead: sales, real estate, 2014)

[binkbok]

Hi everyone!

I am currently looking to relocate to St Pete. Areas like Old Northeast have seen significant increase in housing values over the last few years, and I am trying to understand how this will affect property taxes.

I can seem to make sense of how much the values will increase. For example, the Just/Market value of a home selling for $500K in 2013 is $262K. When I use the assessor's site and do a sales query, the sales comparison number if $317K.

How does I make sense of this? There are homes that sold in 2014 for $454K, and their sales comparison number is $279K.

Should I just assume that the just value of always going to be 60-65% of my purchase price?

[chi_tino]

No - absolutely not. Those values are completely irrelevant to a new buyer. Don't even look at them.

See my recent post on this exact topic:

//www.city-data.com/forum/tampa...x-rates-2.html

The sole number that drives your property taxes is how much you pay for the property. Any other number is irrelevant. The assessor will magically "adjust" the market value of your house to a number similar to what you end up paying for it.

The purchaser of a $454k house in St Petersburg, if homesteaded, will pay about $9,200 in property taxes the first year.

[bentlebee]

[quote=chi_tino;34851031]No - absolutely not. Those values are completely irrelevant to a new buyer. QUOTE]


As a real estate Broker I have to disagree with that statement. We use it for every offer that a buyer may consider to advise on an offer and we look at the just value as well as a CMA, etc.

You can't completely dismiss it.

[The Villages Guy]

Originally Posted by chi_tino

No - absolutely not. Those values are completely irrelevant to a new buyer. Don't even look at them.

See my recent post on this exact topic:

//www.city-data.com/forum/tampa...x-rates-2.html

The sole number that drives your property taxes is how much you pay for the property. Any other number is irrelevant. The assessor will magically "adjust" the market value of your house to a number similar to what you end up paying for it.

The purchaser of a $454k house in St Petersburg, if homesteaded, will pay about $9,200 in property taxes the first year.

What you bolded is 100% incorrect.

Here is how it works:

Real Estate Property « Pinellas County Tax Collector Website…

"Real estate property taxes are considered ad valorem taxes, meaning they are based on the value of the property, as determined by the Pinellas County Property Appraiser."

Please note that what the appraiser thinks your home is worth for tax purposes can be vastly different than what you paid for it. You better hope he/she values it lower for tax purposes than you paid. We pay FAR lower than this member posted.

[binkbok]

Thanks for your posts. What I want to understand is what the likely tax will be on a property.

So for example this house: ] sold a few weeks ago for $454K. The Sales Comparison is $279K, what will the new appraisal be?

Will the tax rate actually be 454*23.1=$10,500? Or will it be based on the price in the Sales Comparison of $279*23.1=$6445?

[Pragmaticus]

Not really.

What you paid for the house IS NOT the sole controller of the value as determined by the appraiser. Not at all. It will, if what you pay is inline with the "value" the appraiser put on the house. Just because you pay 100K or on the flip side 700K on 400K home, doesn't mean it will be valued on either of those values.

The appraiser's just market value calculation is consistent for a neighborhood. When they move those number up or down, they usually are consistent for a neighborhood irrespective of what you pay. Do these numbers are similar to open market values? The answer is sometimes yes sometimes no. For example, in my hood house sell about 30 to 40% more than what the appraiser puts out. In some other area, may be not. Also note that the appraiser's numbers are lagging indicator--they are just following the market--adjusting up or down based on neighborhood comps for the past year. So, depending on the cycle (curve on the housing price), it can under or over estimate actual market value.

For you what matters is what neighborhood comps (closed house values) are saying. The rest is just noise. Look at the closed COMPS and have an idea of what the marketing is. If you are trying to estimate your tax liability go with appraiser's value minus exemption and not what the seller is paying. Depending on their tenure on the house, they may be paying less than what you--the new buyer--is going to pay.

[binkbok]

Ok, so I am seeing most 3br/2ba homes of about 1700 sq. feet go for $450-520K in Old Historic Northeast. Should I assume the Just Value on a home would be in this range?

Then would I subtract the 50K for first year Homestead expemption, and that taxes would be $400-480K * 23.1 = $9,240-$11,008?

That's an incredible increase for the government. Do I have my head on straight?

[chi_tino]

binkbok, the $9-11k range is absolutely correct. My property taxes are also up in the five figures, so I feel your pain. However, when I moved from another state to Florida, my five-figure state income tax bill went to zero.

When a property changes hands, the property taxes can go up an UNLIMITED amount. The sale of a home gives the assessor a one-time chance to mark it up to the true market value (i.e., what you just paid for it). You bet they are going to take advantage of that.

You can hope that there is a discount, but if the assessor decides to mark it to full value, you have no recourse to appeal it. You are the one who just set the market value!

bentlebee, you are discussing something else. The poster isn't asking for a CMA or a negotiating position. He is asking what his property taxes will be if he actually buys it for X dollars.

And yes, my math is the correct math to use. If the buyer is depending on a market value discount and doesn't get it, they could be in big trouble.

PriusH8r, don't bring Save Our Homes calculations into it. That wasn't the question, either.

On a side note, if you make improvements (that require a permit), they also get to tax you at the full millage rate on those additions. I added a $50k pool and the assessor immediately added $50k to my market value and almost $1,200 to my annual tax bill. However, that incremental amount is depreciated and will shrink every year.

[Pragmaticus]

Originally Posted by binkbok

Ok, so I am seeing most 3br/2ba homes of about 1700 sq. feet go for $450-520K in Old Historic Northeast. Should I assume the Just Value on a home would be in this range?

Then would I subtract the 50K for first year Homestead expemption, and that taxes would be $400-480K * 23.1 = $9,240-$11,008?

That's an incredible increase for the government. Do I have my head on straight?

What is the just value the property appraiser put on the house AND similar homes in near by? Check 2 or three houses nearby with similar characteristics. Your just value next time is going to be an up or down a few percentage from those values. The appraiser is not going to move the just value up or down based on one single house. They go up or down in a neighborhood with similar percentage. Then subtract the exemption from those value and you have a ballpark number. Just because you pay a certain amount doesn't mean your house single handedly have a number of its own, way different than the others. For example, if nearby similar homes are 400K assigned to them irrespective of what you pay for the house (300K or 500K) the appraiser will put 400K +- few percentage (5 to 10%) depending on the neighborhood's latest comp.

Hope this helps.

Good luck!

[The Villages Guy]

Originally Posted by chi_tino

binkbok, the $9-11k range is absolutely correct. My property taxes are also up in the five figures, so I feel your pain. However, when I moved from another state to Florida, my five-figure state income tax bill went to zero.

When a property changes hands, the property taxes can go up an UNLIMITED amount. The sale of a home gives the assessor a one-time chance to mark it up to the true market value (i.e., what you just paid for it). You bet they are going to take advantage of that.

You can hope that there is a discount, but if the assessor decides to mark it to full value, you have no recourse to appeal it. You are the one who just set the market value!

bentlebee, you are discussing something else. The poster isn't asking for a CMA or a negotiating position. He is asking what his property taxes will be if he actually buys it for X dollars.

And yes, my math is the correct math to use. If the buyer is depending on a market value discount and doesn't get it, they could be in big trouble.

PriusH8r, don't bring Save Our Homes calculations into it. That wasn't the question, either.

On a side note, if you make improvements (that require a permit), they also get to tax you at the full millage rate on those additions. I added a $50k pool and the assessor immediately added $50k to my market value and almost $1,200 to my annual tax bill. However, that incremental amount is depreciated and will shrink every year.

I didn't bring anything into it, other than to provide the Pinellas County tax site link, which clearly states how they calculate taxes........which is not by what you paid for it.