Sarasota Property Taxes

Sarasota county recently approved the first property tax rate increase in approximately ten years. The modest increase which was approved was only a 0.3 percent increase. This increase was approved in part due to the decreasing property values which have come down from their peak of $63 billion to the current valuation of $47 billion.

Doc Stamps & Closing Costs

A documentary stamp tax is levied on documents that convey interest in real property.  In all Florida counties except Miami-Dade the doc stamp is calculated  as $.70 per $100 of the total consideration paid.  The documentary stamp tax on mortgage instruments and liens is $.35 per $100 dollars of value.  It is customary that the buyer pays the documentary stamp tax on the mortgage and that the seller pays the documentary stamp tax on the deed at closing.

Documents that convey interest in real property and that are subject to taxation include:

• Warranty deeds
• Quit claim deeds
• Deeds in lieu of foreclosure
• Easements
• Assignments of beneficial interest in a trust
• Assignments of leasehold interest

To calculate closing costs on any real estate transaction including title insurance  you can use my closing cost calculator.

Homestead Exemption

Any person owning and residing in a Florida home or condominium may file for Homestead Exemption which will exempt the first $25,000 of the property’s value from taxation. A total of $50,000 may be exempted from taxation with the first $25,000 applying to all property taxes including school district taxes. The second $25,000 applies to the property’s assessed value that is between $50,000 and $75,000 and only applying to non-school taxes. To qualify for Homestead Exemption a property owner must have been living in the home or condominium since January 1st of the tax year and must make a Declaration of Domicile or be registered to vote in the county in which the property resides. One should also have a Florida Driver’s License. The initial application for Homestead Exemption must be made on or before March 1st of the tax year. Additional exemptions are available for widows or widowers, the disabled, the blind, and persons over 65 years of age.

Mortgage Forgiveness Debt Relief Act

On December 20th, President Bush signed into law H.R. 3648 otherwise known as the Mortgage Forgiveness Debt Relief Act.     Prior to this if a homeowner were to sell their home for less than the amount of the mortgage and the difference were forgiven by the lender, the amount of the forgiven debt would be taxable.  This new law will prohibit the Internal Revenue Service from striking with the foot when life has caused one to assume a prone position.  Scenarios in which this law would apply would include any foreclosure, short sale or deed in lieu were any portion of debt is forgiven by the lender.  Lenders do make a practice of forgiving such debt in cases in which the homeowner has little or no assets other then the mortgaged home.  The new law applies only to debt forgiven on a principle residence. 

Proposed Florida Tax Reforms

The Florida House has voted 97-18 to approve SJR 2-D and place it on the January 29th, 2008 ballot. The House then adjourned Special Session “D”.

This plan, which the Senate worked on over the weekend and presented to the House Monday night, has several components. Here are the highlights:

– provides statewide portability up to $500,000 in value for homesteaded Floridians, including school taxes, and is retroactive to Jan. 1, 2007.
– creates a $25,000 tangible personal property tax exemption for businesses.
– creates an assessment cap of 10 percent for all non-homestead property, but the cap will sunset in 10 years and must be placed on the ballot for reauthorization. This provision does not include school taxes.
– in addition to the current $25K homestead exemption, the portion between $50-75K would be exempt from property taxes – though the school board portion would still be taxed. The average savings for this component is $240 a year.

The House emphasized repeatedly that property tax reform is not finished, and that they would be working on the issue in the next regular session.

Florida Real Estate Market to Boom Again

At a recent meeting of Realtors in Orland Governor Charlie Christ said in a speach, “Florida is going to have a sonic boom when this happens.  You’re going to busier than you’ve been in your life.”  He wnet on to urge support for pending legisaltion that promises to lower property taxes and insurance rates.  Judging by the number of clients that I have spoken to that are delaying purchases pending improvement in the market, insurance and tax reform, I woul agree that we will see a surge in purchasing if meaningful reform is passed.

Sarasota Real Estate Taxes

Now that the TRIM Notices have gone out property owners will have 25 days from receipt to file a petition to the Value Adjustment Board if they fell that their assessed value is too high.  In today’s market it probable that the assessed value is higher than the actual market value.  In addition to filing a petition to the Value Adjustment Board through the Clerk of Court property owners may request an informal meeting with the Property Appraiser.  If either of these remedies does not result in a satisfactory outcome property owners may file suite in Circuit Court.  This remedy must be done within 60  days of the value certification. 

Three Ways to Challange Your Property Taxes:

1. Informal Conference  with the Property Appraiser
2. Petition the Value Adjustment Board
3. File Suite with in Circuit Court

For more information visit the Preoperty Appraiser’s website at www.sarasotaproperty.net.

In order for a petition to be considered timely filed, it must be received by the Clerk to the Value Adjustment Board prior to 5:00 PM local time on September 7, 2007. The Clerk is located on the 2^nd floor of the County Administration Center, 1660 Ringling Blvd., Sarasota, FL. The mailing address is Clerk to the Value Adjustment Board, Board Records, 1660 Ringling Blvd. 2^nd Floor, Sarasota, FL 34236. If you reside in the South County area, petitions will be accepted in the Office of the Clerk of Court at the South County Administration Building, 4000 S. Tamiami Trail, Venice, FL.

Affordable Housing & Impact Fees

Seemingly, the county has no understanding of the impact fees.  Although so much lip service is given to the issue of affordable housing, the county is yet again considering raising impact fees.  Common sense would indicate that higher impact fees would greatly impact the availability of affordable housing.  Higher impact fees are easily absorbed by into the cost of luxury homes that are so common in Sarasota but the proposed impact fee of $19,600 for a 2,000-square-foot is cost prohibitive for the average family who would live in such a home.  Sarasota has already become a playground for the wealthy as confirmed by Westfield’s by planned overhaul of South Gate Plaza to include a double sized Saks 5th Avenue.  Higher impact fees for new home would increase the cost of construction of new homes and will spur builders to continue to focus thier efforts on the luxury market.  This is not the way to address the affordable home issue.  The counties focus needs to be on it’s budget so that impact fees and real estate taxes can be lowered.

Declaring Homestead in Sarasota

New buyers wishing to declare homestead in Sarasota will need to make the home their permanent residence on or before January 1st, 2007 to qualify for the $25,000 Homestead Exemption.  Buyers who do not use the home as their primary residence at the beginning of the year will not qualify for the exemption even if they move in just a few weeks later.  Conversely, owners who use a home as a primary residence on January 1st and later move out will enjoy the benefits of homestead exemption for the entire year.  Buyers should be aware that if they purchase a home from a seller who is currently a permanent resident the tax bill will likely go up as the 3% Save Our Homes cap is removed and the home is assessed at the new market value.  The deadline for completing the application for homestead exemption is March 1st, 2007.  For more information visit www.sarasotaproperty.net