Reduced Property Taxes in Palm Beach County, Florida. Fact or Fiction?

So, Palm Beach County and State of Florida residents, didn't we all jump for joy that we were finally going to see a reduction in our property taxes? Why, we're getting a two times increase in the Homestead Exemption. In addition, because of the falling property values, our appraisals should also drop, thereby further lowering our tax liability, right? In the words of sports announcer Lee Corso, "Not so fast my friend".

How many of us have heard the term "Roll Back Tax Rate"? This is something that is calculated each year by taxing authorities that when applied to the total taxable value within their jurisdiction allows them to produce the same amount of dollars as they did in the previous year. It reminds me of something akin to my developments HOA dues increasing, not because we are receiving any additional amenities, but because of the foreclosed homes that are no longer contributing to the budget. Kind of like "Roll Back HOA Dues".

There are some bright spots, however. We did get the portability issue passed, that allows sellers of homes to take the increased value in the homes they have sold and apply it to reduce the taxable value of the new home they are purchasing. For example, if the market value of your homesteaded property is greater than its assessed value, you are allowed to transfer up to $500,000 of your actual assessment cap savings to your new property. Say your market value is $250,000 and the assessed value is $175,000 your assessment cap is $75,000. Now, lets say you are purchasing a home for $300,000. By backing out the assessment cap of $75,000 your new assessed value is $225,000, and after applying the $50,000 Homestead Exemption your taxable value is now $175,000. Without that portability, the taxable value on your new purchase would be $250,000. In Jupiter, Florida where I live, with an typical millage rate around 2%, that represents a savings of $1500!

The bottom line is that there needs to be a defined intake of monies to run each municipality. I think we all know that, absent a decrease in the budget, any benefit that we see as taxpayers will be balanced on the other side of the equation by an increase in taxes. Just one man's humble opinion. What do you think?

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