Why is a Miami condo's property tax higher after you buy it?

Because Florida caps how fast an owner's assessed value can rise while they own the home, and the cap dies with the sale. A homesteaded owner's assessment rises by no more than 3 percent a year or the change in the consumer price index, whichever is lower, under Save Our Homes; every other owner's rises by no more than 10 percent a year for non-school levies. On the first of January after you close, the property appraiser resets the assessed value to just value, which means market value as the appraiser measures it, and the cap starts again from there. A seller who has owned for a decade is paying tax on a number far below what you paid. On a brand-new condominium there is no seller's history at all: the first full bill arrives the year after the building is complete and the unit is assessed as finished for the first time.

Save Our Homes is the constitutional cap on assessed value for homestead property, carried in section 193.155 of the Florida Statutes. Once a home is your homestead, its assessed value for tax may rise each year by the lower of 3 percent and the change in the consumer price index, whatever the market did. Over years the gap between assessed value and just value, the Save Our Homes benefit, can grow large, and that gap is what a long-time owner's low bill reflects. The cap limits the assessment, not the tax rate: the millage set each year by the county, the city, the school board and the other taxing authorities applies to whatever the assessed value is. Read does buying a Miami condo make you a Florida resident for what homestead requires.

A change of ownership triggers reassessment. On the first of January following the sale the appraiser sets the assessed value at just value, the cap resets, and the new owner's first bill in November of that year reflects it. The closing statement prorates the current year's tax between you and the seller on the seller's bill, which is the last time that number appears. A buyer who holds the home without homestead, a second-home owner or an entity, is protected from the following year by the 10 percent cap on non-homestead property, which does not apply to school district levies. A buyer who makes the home a homestead is protected by Save Our Homes from the year after the homestead is granted. Read what a Miami closing costs and what closing actually costs.

A new building is assessed as substantially complete on the first of January; before that the parcel is taxed as land and partial construction in the developer's name. If you close in a building finished mid-year, the tax prorated at closing is on that lower number. On the following first of January your unit is assessed as a finished home at just value, and the November bill that year is the first full one. The buyer asks the county property appraiser's office how the unit will be assessed in its first full year rather than reading last year's bill on the parcel, and the appraiser publishes an estimator for exactly this purpose. The building's own charges, the assessment the association levies, are separate and come from the budget, not the tax collector. Read documents before closing on a new Miami condo and penthouse running costs.

Two things. The homestead exemption removes a slice of assessed value from tax, part of it from all levies and part from non-school levies, for a home that is your permanent residence on the first of January, applied for by the first of March of that year. And it starts the Save Our Homes cap. A buyer who moves to Florida from another state and closes in October applies by the following March, and the cap begins the year after that. A buyer moving within Florida from a homesteaded home may carry part of the old Save Our Homes benefit to the new one, portability, within the period the statute sets, which lowers the new assessment from the start; the amount carried is capped by statute. Whether a home held in a trust or by an entity can be homestead is a question for counsel: the exemption belongs to a natural person's permanent residence, and the paperwork for a trust is specific. Read LLC, trust or personal name and is there state income tax in Florida.

The first of January: the assessment date, and the date you must own and occupy for that year's homestead. The first of March: the homestead application deadline for that year. August: the notice of proposed property taxes, called the TRIM notice, with the proposed assessment and millage and the deadline to petition the value adjustment board. November: the bill, with a discount for early payment that steps down month by month. The county and city set millage each year in September. A buyer who reads those five dates against a closing date knows which year's bill is the first full one. Read the ownership file for a Coconut Grove or Coral Gables condo and the ownership file for an Edgewater condo for where the bill and the notice are kept. The desk reads the parcel's history and the appraiser's estimate with the buyer before the budget is set, and refers the homestead and trust questions to counsel.