In yet another example of tax funds that can be cut from the budget, people who want to upgrade their homes at taxpayer expense are angry that the state isn’t taking your money and giving it to them.
That’s $280 million per year that is stolen from one set of homeowners and given to another. A married couple with two kids who make more than $27 per hour, can’t receive your money.
That budget money is $30 taken from each household in Florida. Just one program. How many more can be cut?
As I have posted before, property taxes in Florida are easy to understand, mostly.
In Florida, the county property appraiser is an elected position that estimates what your house is worth each year, called your “market value.” If your house is your primary residence, you can take a deduction called the “homestead exemption” of $25,000 from that market value if your home has a market value of more than $50,000. If your home has a market value of over $100,000, you can take another $25,000 exemption. This second exemption doesn’t apply to school taxes. The result is called your “assessed value.” Because of the second homestead exemption, this means that your home gets two assessed values: one for property taxes, and the second assessed value for school board taxes.
Each July, the property appraiser mails out the proposed value of each property to the property owner. If you don’t think that the value is fair, you have 30 days to appeal that valuation. Most people want it to be as low as possible, because that is the value that your taxes are based on.
It seems complicated, but it really isn’t. For example, let’s say that your house has been deemed by the property appraiser’s office to have a fair market value of $125,000, and your county charges a property tax rate of ten mills, plus the school board charges of 6 mils. You would take the $125,000 market value and subtract your homestead exemption to arrive at an assessed value of $75,000 for property taxes, and $100,000 for school board taxes. The tax of ten mills would make your property taxes $750 and $600 for the school board taxes, making your total property tax bill $1350. Clear so far? Good, because it gets a bit more complicated.
Back in 1995, the voters of Florida passed an Amendment to the state Constitution that limits the annual increase in the assessed value of your homestead to the lesser of 3% or the consumer price index. Since real estate increases more than that in value each year, the longer you own your home, the less you pay in taxes. The gap between the market value and the assessed value is called your “Save Our Homes” credit.
In most cases, you want the property appraiser to set your assessed value as low as possible. The only reason you don’t, is if you are about to move to a more expensive home. The reason is called portability. If you are moving from an old house to a new one, you can take your Save Our Homes credit with you. That can mean a significant tax savings.
There are other tax exemptions.
The tax collector (also an elected position) charges a “millage rate” as an “ad valorem” property tax. Each “mill” is 0.1% of your home’s assessed value.
The county charges me 5 mils, the school board charges a bit over 6 mils, water control district charges half a mil; police, fire, hospital taxes, and EMS collectively charge 1.4 mils, the town charges 7.5 mils, and some other charges total up to almost 21 mils, or about 2.1%.
Some towns and counties charge fees that are part of your property taxes, but are not based on your property value. These are usually flat fees, for example each address may be taxed $150 a year for fire fees regardless of value. This is usually done so that the local taxing officials can raise taxes for social programs while blaming the increase on something palatable like the fire department. They simply take the money they were spending on fire and redirect it to whatever pet project they want to fund, then use the fire fee money to continue (or even cut) the fire department’s funding. Then they blame the fire department for the “tax increase.”
After homestead exemptions, other exemptions, and Save Our Homes are all subtracted, the result is the “Taxable Value.” The milage rate is applied to that number. If you own a $300,000 house, you would be paying $5500 a year in property taxes. I pay even more than that.
Taxes aren’t just a money grab, they are a means of social engineering when you grant carve out exemptions to favored groups like the AARP, illegal immigrants, and others. They are also a grift, in that much of this money gets directed into the pockets of politicians and their friends.
and you have to pay them, or see your property confiscated and your ass in jail.
One note about the exemption for public safety that are injured in the line of duty. If you are off duty and see an auto accident, medical emergency, or fire, the pressure to do something is large. I used to stop for those sorts of things. Until the case of Shane Kelly, that is.
Firefighter Kelly stopped to assist victims of an auto accident on the Florida Turnpike in 2002. Shane was off duty. He was killed in full view of his wife when a tractor trailer slammed into the accident vehicles. There were 2 occupants of the truck that killed Firefighter Kelly, and there was enough confusion as to which of them was driving that neither of them was ever charged.
The Federal Government ruled that Sean Kelly was acting in his capacity as a private citizen when he was killed, and since his death was not a line of duty death, his widow was not entitled to any of the benefits of the LOD status. Imagine how you would feel as an EMT, Firefighter, or other responder if you knew that helping an injured person carries the same risk of injury or death whether you are on duty or off duty, except that if you are injured, not only are you NOT paid for your time and skill, but you are not insured for that potentially career ending injury. Who will feed your family? Care for your kids?
In a meeting with my employer’s attorney, where Firefighters were attempting to get a written policy on what would be considered Line of Duty injury for off the clock employees, we were told that such decisions for off duty personnel would be made on a case by case basis by Administration AFTER the fact. I made a comment along the lines of, “So you get to decide AFTER I am injured whether or not you will pay for it. Will that decision take factors like the cost of treatment and PR benefit to you into account?” That REALLY pissed off the attorney. (I call ’em like I see ’em.)
After I learned of that case, I stopped helping out while off the clock. That policy marked the end of my stopping to help in emergencies. In fact, that policy change was a huge factor in my decision to retire.
How do I feel about fire department taxes? That is a topic for later in this week. I know what you probably THINK my feelings are, but you are probably wrong…
Here is an interesting map of the world’s highest marginal tax rates.
I think that there is an important thing you need to realize has been overlooked about the US tax rate- it only is looking at IRS income tax. It isn’t taking the US Social Security tax rate into account. Adding that into the mix, and the highest US marginal rate is about 49 percent.
Furthermore, property, sales, or other indirect taxes are not included. It also omits state, provincial, and municipal taxes. In total, the US total tax burden averages out to about 31 percent of total income. Still, more than half of the people who live in the US are net receivers of US tax money. It’s a critical number. When more than half of the people who vote receive more money than they pay in taxes, there is no way that you can get the public support and votes to change anything.
Most of the people in the country care more about what people have left over after taxes than they are about the taxes that they themselves are paying. When I point out that a flat ten percent income tax with no deductions or adjustments permitted would get the nation $2.3 trillion a year in income tax revenue, people still complain. Why?
This would mean that a person who makes $10,000 a year would pay $1,000 in taxes, while a person making $10 million would pay $1 million in taxes, ten times as much. This isn’t as fair as a flat rate, but it’s more realistic and practical.
Still that isn’t good enough, because when I do point that out, the counter argument that they make is “Yeah, but that leaves the poor guy with only $9 thousand, while the rich guy still has 9 million.” To these people, taxes are a way of taking money from the rich so that everyone is equally poor. In other words, communism. It’s caused by pure envy and jealousy.
I maintain that if you took all of the wealth of the nation and redistributed it to each person, giving every one a million dollars, within 10 years the people who are now poor would all be broke, and the ones who are rich would mostly be rich again. Why?
The poor would spend it because they see money as something they use to buy things. Give people with this attitude a million bucks, they will have a house full of big screen TVs, gold chains, and fancy cars.
The rich would be rich again because they see money as a vehicle to make more money. While there are people who are rich due to graft and corruption, largely those people are government officials who earn their money by peddling influence. Most of the nation’s rich, the people in the top quintile, are there because of skill, hard work, and attitude. Give them a million bucks, and they will start a business selling those baubles to the people that are soon to be poor.
All taxes are supposed to be so that a society can have the things that it needs for us to exist- fire, police, courts, and common defense. Instead, it has become a way for one group of people to steal wealth from those who have earned it.
I don’t think that we should have ANY Federal level taxes on individuals. Instead, the Federal government should charge a per capita tax to each state. Let the states figure out how they want to come up with the money. Each state can charge it to their citizens, or perhaps they can add it as a tariff to exports. You want Alaskan oil? Salmon? Crab? Alaska is charging a tariff on that good in the amount of $$ to cover Alaska’s per capital tax obligations. Perhaps Florida could charge a tourist tax for beach or theme park access, or a tax on oranges. New York would be free to have an income tax. Each state decides. You get the idea.
That was painful. I finished my taxes, and thanks to some capital gains taxes that we knew were coming, we are going to have to write a check to the IRS for almost $10,000. This is why I hate this time of year.
The Democrats want to give a $5000 tax credit to couples who spend money on products made by small businesses in the USA. I plan on buying guns, gold, ammo, and other important supplies.
I just have to source them from qualifying vendors.
As you will recall, I was appealing the tax assessor’s valuation of my old house because I felt that the house had been undervalued for tax purposes. Since that would actually increase the taxes in my new house (I explain that here) I decided to appeal the valuation. The hearing was just a few days after my mother had passed away, so I will admit that I wasn’t as prepared as I should have been.
The hearing was in front of a magistrate. One thing that I felt was unfair about this is that the magistrate was an employee of the tax assessor’s office in another county. Since all of the counties in the state use the same methods and computer software, I don’t feel that the magistrate is an unbiased individual.
Still, I thought that I presented my case pretty well. I pointed out that my house was valued at $154/sf, but every house in my neighborhood sold for $195 to $210 per square foot, even using the assessor’s office’s numbers. Even at the low end, my house was undervalued by a significant margin.
That’s when the excuses started. The assessor claimed that they were permitted by law to subtract the customary costs of sale from the fair market value and then they began pointing out that the other houses that had sold had features that my house didn’t- one had a pool, one was a corner lot, two others were on the edge of the neighborhood, etc. This, according to them, made my house less valuable.
By the end of the hearing, the magistrate and the assessor were both explaining to me that I just don’t understand real estate. Keep in mind that they were all government employees whose judgement means nothing, because they don’t invest in real estate. They merely tax those who do. I was able to show, using the assessor’s own data, that the assessor’s office is consistently 15-25% lower than actual market value. That didn’t matter, I got lectured about how TOP MEN used computers to value this property, and the methods are used all over the state.
So I thought I had lost. I resigned myself to getting screwed by the tax man.
Imagine my surprise when I got the magistrate’s decision. I didn’t get a total win, and I didn’t even get as much as I hoped for, but I did get something. The magistrate recommended that my valuation be increased from $154 per square foot to $164 per square foot. Not great, but the increase will lower my property taxes on the new house by about $400 per year. In total, the deductions from Save Our Homes portability decrease my property taxes by about $3000 a year.
Do I like paying $750 a month in property taxes? No. That’s why I fight to keep my taxes as low as I can, and this hearing cost me $25 plus a few hours of my time. Property taxes and the 6 percent sales tax are the only taxes we pay here in Florida, so it’s just something that we have to live with. At least we don’t have personal property taxes or income taxes. Still, I often wonder what it is we get for that tax rate.
Florida Democrats are proposing a law that would require HOAs to donate 15% of their dues money to charities in the community where they are located. The bill text is found here. (pdf warning)
This amounts to a 15% tax placed on the backs of all property owners. What this means is that all HOAs in Florida would have to increase their association dues. This will increase the costs of housing for everyone in the state. Even renters.
Democrats: they hate property owners. They hate America. The only groups that they like are sexual deviants, criminals, and illegal immigrants.
So how do you fight this, should it pass? The law doesn’t specifically say what organizations that the donations have to benefit. This is what it requires:
Donate or use at least 15 percent of the association’s total annual income to benefit the community in the county in which the community served by the association is located.
What constitutes a “benefit the community”? Perhaps using it to donate to a progun group, establishing firearms safety courses, or some other pro-liberty cause. I mean, increasing gun ownership benefits the community, at least in my opinion.
The county property appraiser has answered my request to increase the market value of the house. They think that I am nuts because I am essentially asking them to increase my taxes. That is wrong in any event. Because of Save Our Homes, my assessed value can’t increase by more than 3% if I stay here, and if I move it actually cuts the taxes in my new home, because it maximizes my SOH credit.
Thank you for contacting our office. I want to make you aware that the value assigned by our office is for tax purposes only, and is not reflective of the resale value of your home. You want this value to be as low as possible. The value we arrived at is what you will pay taxes on. Did this answer your question?
If they had half a brain they would see what we are doing here.
EDITED TO ADD: I told them that I still want my value increased. They replied:
So let me understand your email more accurately: You are requesting that we raise your property taxes?
Now my wife is nervous and says “Are we sure that we know what we are doing here?”
Yes, I am. The Save Our Homes Credit is portable, and increasing the market value on our current home will reduce our taxes in the new house by about $2200 a year.
In 1992, Florida voters were worried about runaway property values causing drastic increases in property taxes from one year to the next. With so many people wanting to move here, property values were climbing rapidly, and this was causing property taxes to skyrocket. Amendment 10 was proposed, which is a benefit of the homestead exemption that provides homeowners protection by limiting the maximum that the assessed value of their home for tax purposes can be raised to 3%, or the CPI, whichever is lower. The Amendment to the state constitution passed, and it became the law of the land in 1995.
How does it work? Like anything that relates to taxes and the government, there is a lot of confusing math involved. Let’s say that you live in a taxing district that taxes your property at a rate of 10 mils, and you bought a starter house at #1 First Ave. for $75,000 in 1993. At the time, the state of Florida had a $25,0000 homestead exemption. You would then owe 10 mils on the $50,000 taxable value of the home, or $500 in property tax each year. Your house was valued at $80,000 in 1994, and you paid $550 in taxes for 1994.
A housing boom hits, prices go way up, and by 1995 your home is now valued at $100,000. Your tax bill would have been $750 (a 50% increase from just 2 years before), but save our homes had gone into effect, so the increase in your home’s assessed value only went from $80,000 to $82,400. That means your property tax was only increased to $574.
Eight more years go by, and you decide in 2003 that you want to sell. Your home is now worth $145,000. Of course, save our homes only has you paying taxes on the assessed value of $104,000, minus your homestead exemption, making your tax bill $790 for the year. Anyhow, you get $150,000 for the place. The tax assessor still says it’s worth $145k, and the guy who buys it will have to pay $1200 in taxes in 2004, assuming the value stays at $145k. (you already paid 2003’s taxes)
You, however, bought your second house at #2 Second Street. You were able to get this one for $240,000. Your portable SOH credit was (145,000-104,000=41,000) so even though the tax guy says this place has a market value of $220,000, you will only have to pay taxes on (220,000-41,000-25,000), making your tax bill $1,540.
Then in 2008, voters approved an amendment that increased the homestead exemption to $50,000 for the non-school portion of property taxes. This complicated things even more, but that is a different topic.
Why do these Amendments keep getting voted on? Whenever the Democrats want more voter turnout, they make sure that something of interest to Democrat voters that will drive voter turnout is on the ballot. Tax cuts in property taxes, legalizing marijuana, increasing the minimum wage, saving baby pigs from the slaughterhouse, things like that.