Sunday, September 6, 2009

For the last time, I didn't cause those Truth in Millage or so-called TRIM notices to be delivered. What do you think I am, a witch or a sorceress? I've never put a spell on anybody (as far as I know). Still, some inciteful feedback developed.

First, there was my doctor. I went in for my annual checkup last week. I think my doctor feels guilty for charging me $250 for 10 minutes of his time. He compensates by telling jokes, relaying stories, sharing pictures of his baby and my colt and asking questions about the most minute details of the real estate and finance industries. All the while poking and prodding. Anyway, he makes an effort.

The trivia question for the day was about the assessed value of his building. This was also his joke for the day. He knew the answer before I expressed it.

"Last year the Property Appraiser's Office estimated my building value to be $3.6 millon. This year, they reported a value drop of $500,000, but my taxes still went up! What gives?"

Derek Jacobi said it best in the miniseries "I, Claudius": "Let all the poisons that lurk in the mud hatch out." This is the year we get it. That is to say, we understand it.

It costs a certain amount of money to run a county. It doesn't matter whether the tax valuation of your property goes up or down. Taxes, you will pay.

Finally, it may come clear to all of us. It really isn't the fault of our elected county property appraiser, Ervin Higgs. Those unhappy with the property taxes they must pay should address their city and county commissioners and mayors and budget committees.

Some of you also have a new stunning reality to deal with. The Property Appraiser's Office estimated that the market value of your home declined by, for example, 7 percent. Yet the taxable value declined by, perhaps, only 4 percent.

Huh? If the market value of my home drops from $281,000 to $263,000, shouldn't the value I'm taxed on be reduced by $18,000, too?

No, because we're talking taxes, not arithmetic.

We Florida voters approved the Save Our Homes amendment in 1992. It prevents the tax assessed value of our primary residence from increasing more than 3 percent or the Consumer Price Index per year. So, if the market value of your home goes up, the taxable value does, too -- but by only 3 percent or less.

For three years our legislators lost sleep. "What happens if property values don't increase?" They couldn't stand it. Remote though the possibility was, in 1995, the Department of Revenue passed a rule and it was approved by the governor and the Cabinet.

If the market value doesn't go up, the property appraiser is directed to increase the tax assessed value by 3 percent or the Consumer Price Index.

Get it? Market value of the property went down. Taxable value went down, too -- but then they bumped it up the greater of 3 percent or the CPI.

The final entry in the "Can you believe it?" contest is this one: The market value of my home went up.

Guess what? This could be a good thing. Imagine that the market value of your home increased $75,000. Still, due to Save Our Homes, the home will be taxed on only an additional $650. That means property taxes will go up about $6.17. Whether you are Frankenstein or Einstein, you can figure out that's a very small tax consequence.

Meanwhile, thanks to the new Amendment 1, the portability amendment, the homeowners may receive a benefit when they sell their home.

The increased value creates that much more equity that the homeowners can "port" or carry over to their next home.

What do you think?

Regina E. Corcoran, SRA, is a Florida real estate broker, state-certified residential appraiser and residential contractor. She is president of AmeriRealty Corp. and vice president of AmeriMortgage Corp. She can be reached at ReginaECorcoran@cs.com. Corcoran writes her column exclusively for The Citizen. It appears every other Sunday.