In essence, if you are qualified and register your home as your “homestead”, the assessment value of your home cannot be raised more than 3% per year.
Let’s take an example:
You bought your home in 1999 and the Taxman appraised it at $ 200,000.
In 2006, its real assessed value is $ 400,000.
Meanwhile the property’s real taxable value went up at the maximum allowed rate of 3% per year.
Your tax notice indicates in 2006 $ 245,947.77 as the base taxable value. Your “Save our Home” protection has therefore saved you a lot of money.
In 2007 however, your property value went down it is now assessed at $375,000 instead of $400,000. You would of course expect a drop in your property taxes, right? Wrong.
Your 2007 tax notice will indicate a 3% increase in the taxable value, which becomes now $253,354.02. Consequently, you will pay more taxes in 2007 than in 2006, even though your home is worth less money.
Weird? Not if you are aware of the “recapture” rule adopted in 1995. The 3% increase will continue to apply every year, regardless of your property ‘s real value, until the taxable value and the real appraised value are equalized.
It means that, after a period of high raises in property values, a decade or more of flat values would progressively eat up most or all the savings that you had made through the “save our homes” protection. Eventually, you will end up losing it completely. Of course this is theoretical. But it is starting to happen and
The bizarre situation doesn’t affect the non-residents and all those who cannot take advantage of the “save-our-homes”.Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,