News Column

Taxable value up for 86 percent of properties in Palm Beach County

July 12, 2014

By Jennifer Sorentrue, The Palm Beach Post, Fla.

July 12--Chances are you will pay more in property taxes this year unless Palm Beach County, the school board, your town or any other taxing district where you live reduces their tax rates.

And if you own a business property or an apartment that you rent out -- anything that doesn't have a homestead exemption -- most of you will see a 10 percent tax increase from any government that says it's holding its tax rate at last year's level.

As a result of the rebounding real estate market, the vast majority of property in Palm Beach County -- 86.4 percent of the parcels with taxable value -- increased in value this year. That rise in taxable value means owners will pay more in property taxes if local governments hold their tax rates flat.

To avoid a tax hike, the county and other taxing agencies would have to lower this year's tax rates enough to offset the rise in property values.

"If the city keeps the tax rate the same and you had an increase in value, then your taxes are going up," Palm Beach County Chief Deputy Property Appraiser Dorothy Jacks said. "The city says, 'We aren't raising our tax rate.' Well, you are raising your budget even if you are keeping your tax rate the same."

For people whose only property holding in Florida is a principal residence, the increase in their homestead's assessed value is limited to 1.5 percent this year under the state's Save Our Homes law. If a local government holds its tax rate flat, property taxes for a homestead owner will go up by a little more than 1.5 percent because of the way that taxable value is calculated.

But most owners of second homes, rental units, commercial property and other non-homesteaded real estate in the county will be hit much harder. Fifty-three percent of the non-homesteaded properties rose so much in assessed value that a 10 percent cap had to be applied. Because those property owners saw the largest increases in their real estate's taxable value this year, they would see the steepest tax hikes if rates aren't reduced.

At the request of The Palm Beach Post, an analysis released by the Palm Beach County Property Appraiser's Office last week shows that 86.4 percent of the taxable parcels in the county increased in value from 2013 to 2014.

The county has 630,701 property parcels, but the analysis looked only at the 563,990 parcels where taxes will be assessed for both 2013 and 2014. It did not include new construction, recently annexed real estate or properties that aren't taxed, such as churches and government-owned buildings.

Of the 563,990 parcels included in the analysis, 487,197, or 86.4 percent, will see their taxable value go up this year. Taxable values fell for 30,777, or 5.5 percent, and the remaining 46,016 properties, or 8.2 percent, will see no change in taxable value this year.

Meanwhile, a separate analysis showed the county has 325,185 homesteaded properties and 305,516 non-homesteaded properties.

Of the 305,516 non-homesteaded properties, 163,327, or 53 percent, will see their taxable value capped at 10 percent this year, according to the property appraiser's office.

A constitutional amendment approved by Florida voters in 2008 prevents property appraisers from increasing a non-homesteaded property's taxable value by more than 10 percent each year. The 10 percent cap does not apply to school board assessments, meaning that if a second home increased in value by 15 percent and the school board's tax rate remained steady, the owner would have to pay 15 percent more in school taxes, but only 10 more for other local governments who held the line.

This is the first year since the constitutional amendment was approved that a significant number of non-homesteaded properties have been protected from large value increases because of the assessment cap, Jacks said.

"There are significant savings," Jacks said. "For a number of years we were watching the market drop out. We are now seeing some steady (value) increases more like what we were seeing back in the early 2000s."

More than $4.2 billion in taxable value was removed from the county's tax base this year as a result of the 10 percent cap, the property appraiser's office said.

County officials said those assessments would have generated roughly $18 million in property tax revenue for the county government alone if they hadn't been removed from the tax roll.

Instead the county's tax base grew to $139.6 billion on the first day of 2014, up from $130.0 billion on the first day of 2013, an increase of 7.4 percent according to the July 1 tax roll released by the property appraiser's office.

Under County Administrator Bob Weisman's proposal to keep this year's countywide tax rate the same as last year's $4.78 per $1,000 of taxable value, the county would collect $667.3 million in property tax revenue in 2014-15, about $44 million more than the $623.1 million it collected in 2013-14.

The proposed rate includes 19 cents per $1,000 to pay off $26.7 million in voter-approved debt. Last year the tax rate for paying off the debt was 20 cents per $1,000, so the combined county property tax rate is actually dropping by 1 cent per $1,000.

Budget watchdogs want some of the $44 million in extra revenue returned to taxpayers.

"It is a pretty substantial increase," said Fred Schiebl, head of the Palm Beach County Taxpayer Action Board. "In our view, they should give some of that back to the taxpayer, even if they split the difference."

County commissioners will set the county's proposed tax rate on July 22. The proposed rate is the maximum that a local government will be able to charge in the budget year that begins Oct. 1, unless they notify all taxpayers in the taxing district by first-class mail of a new proposal.

Despite the rising property values, Weisman is not proposing a tax rate cut. He said increased pension costs for Palm Tran employees, declining interest income on the county's investment portfolio and reduced fee money from the sheriff's office left the county with a $30 million budget shortfall this year.

At the end of each budget year, the sheriff's office usually turns over any fees it receives in excess of its annual budget to the county. The county had forecast a $10 million return over a two-year period, but it didn't materialize, Weisman said.

"If we didn't have those three things we could have certainly reduced the tax rate," Weisman said. "There is no opportunity to do that this year without unacceptable impacts."


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Source: Palm Beach Post (FL)

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