Property Tax Assessments and the Eye of the Beholder


AD VALOREM TAX

NEWS UPDATE

Summer Edition 2018

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Sabrina Weiss Robinson

305-789-3574

srobinson@stearnsweaver.com

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PROPERTY TAX ASSESSMENTS AND

THE EYE OF THE BEHOLDER

Assessed value, like beauty, can be found in the eyes of the beholder. Whose eyes are looking at your property? An elected property tax assessor, that's who. He or she has a natural tendency to overvalue commercial property to overcome lower than market values assigned to residential properties owned by voters. That is simply a fact of political life.

Unfair assessments cost more than just higher property taxes. For commercial properties, unfair assessments also establish competitive disadvantages.

No one is obligated to accept unfairness. Every owner, tenant, manager, lender or developer of real estate in Florida is provided an opportunity to determine if the values assigned to their real estate interests are real. When and how to exercise that opportunity requires careful adherence to Florida law. That's what we do.

Our Ad Valorem Tax Group works with property interests all over the State of Florida. Where assessments are unfair we work within the framework established by Florida law to bring assessments down to economic rather than political reality.

TIMELINE FOR THE VALUE ADJUSTMENT BOARD ("VAB") PROCESS

Property Tax is one of the most costly expenditures in real estate. Misjudgments by tax assessors regarding a property's market value, cost, depreciation, capitalization rates, and other factors may result in significant over-taxation. You may have an opportunity to substantially reduce the tax liability for your property through a tax assessment appeal. Appeals follow the timeline below - keep in mind that all deadlines throughout the process are hard deadlines.

Date	Item
August	2018 property tax assessment notices (TRIM notices) mailed to Taxpayers
September	The deadline to file petitions is 25 days after notices (the specific filing deadline will vary by County) and typically falls in mid-September
October/November	VAB sets hearings. VAB gives 25 days' notice for a hearing. Taxpayer provides evidence to Property Appraiser 15 days before hearing. Appraiser gives evidence to Taxpayer 7 days prior to hearing.
November	Tax bills mailed. All property taxes become due November 1st, must be paid no later than March 31st, and become delinquent if not paid before April 1st Note: If Taxpayer pays in full the following "early bird" discounts will apply: November - 4% discount December - 3% discount January - 2 % discount February - 1 % discount
March	Florida Taxpayers must pay their taxes by March 31 of each year, before they become delinquent, in order to maintain an appeal to the VAB. To contest value, the taxpayer MUST pay a minimum of 75% of ad valorem and 100% of non-ad valorem taxes.

LITIGATION OF 2017 VAB RESULTS

Taxpayers who filed a VAB petition in tax year 2017 but are unsatisfied with the outcome may file an appeal to the circuit court. Appeals must be filed within 60 days of the date that the VAB renders its decision. Various counties have already certified their tax rolls.

In addition to representing taxpayers in such appeals, we also defend Taxpayers in appeals of VAB decisions by County Property Appraisers to circuit court (only available where the reduction achieved was greater than 5%).

LEGISLATIVE UPDATE: AMENDMENT 2

Time is running out on a crucial tax cap that has protected owners of commercial property, rental property and land (all non-homestead property) from significant property tax increases over the last decade. A 2008 law caps increases on taxes for such property at 10% per year. Prior to the cap, owners were subject to skyrocketing property tax increases. Often, tenants faced steeper rents due to increased property taxes that were passed along. The adverse consequences of unchecked increased property taxes is self-evident. The cap provided a measure of certainty for commercial property owners, enabling them to budget for expected taxes and to control expenses.

Unfortunately, that protection will expire on January 1, 2019, unless a proposed constitutional amendment is passed by voters in November. Amendment 2, proposed by the Florida Legislature, seeks to make the cap permanent; it provides:

"Proposing an amendment to the State Constitution to permanently retain provisions currently in effect, which limit property tax assessment increases on specified non-homestead real property, except for school district taxes, to 10 percent each year. If approved, the amendment removes the scheduled repeal of such provisions in 2019 and shall take effect January 1, 2019."

To be enacted, Amendment 2 needs approval from at least 60% of the voters come election day. The Amendment should be a no-brainer for the industry, however, recent polling from the Florida Chamber of Commerce shows that the measure has only 58% support among voters. Those interested in seeing the cap made permanent should become engaged in efforts to support its adoption.