Property Tax Appeals Up 150 Percent in Palm Beach County; Appraisals Derided

The Value Adjustment Board of Palm Beach County might have to handle property tax appeals differently this year.

The board is expected to address a closer look at a special magistrate’s findings on appeals, ordering hearings, or hearing of cases, according to county attorney Paul King.

“In the past, they’ve never done this. They’ve always accepted the recommendation of the special magistrate,” King said this week.

The reason for the change? The sheer number of Palm Beach County residents appealing their property assessments shot up nearly 150 percent this year — a sign of widening rebellion over fast-rising property tax bills faced by would-be new buyers and people not protected under Florida’s homestead laws.

• This year, 10,300 county property owners petitioned the Value Adjustment Board over their property appraisals or homestead status, according to preliminary figures released Monday from the County Clerk’s Office.
• A majority (5,461) argue the property appraiser inflated values.

County property values grew 24 percent this year, marking the fifth year of double-digit home price appreciation in a row. The latest surge reflected the 2005 real estate growth, thought by experts to be the peak of South Florida housing market boom.

Palm Beach County Property Appraiser Gary Nikolits said that, in conducting an appraisal, he must consider eight factors, including income and the best, and highest use. He then bases the appraisal on the area that produces the highest potential value. He’s abiding by state law in doing so, he said.

Yet Broward County, just to the south, bases its appraisals on income, thereby also creating a market for affordable housing.

“Appraisers can value properties different ways,” King said. “The only thing is you can’t have appraisers in the same county value (properties) with a different approach.”

In other words, property appraisers basing values on income would have to do the same for all residential and commercial parcels within the county.

“Neither (appraiser) is wrong. They look at it differently. If (the property appraiser) goes by the letter of the law, you have to look for any loopholes to see if there’s any way we can help the people,” King said.

Marina owners accounting for a good number of appeals against rising property taxes have been providing Nikolits detailed information about their individual sites as a means of getting their property values, often based on the potential for waterfront condos, adjusted.

The County Commission on Tuesday is expected to schedule the first of two public hearings on an ordinance that allows certain commercial and recreational working waterfront property owners to defer paying real estate taxes at a maximum 9.5 percent annual interest rate.

“It’s a good first step in the right direction,” said Raymond Graziotto, who co-owns Loggerhead Clubs and Marinas in South Florida and chairs the recently formed Save Our Working Waterfront, a group of citizens protesting recent hikes and pushing for tax help.

“But the county taxes that can be deferred are only 20 percent of the total tax bill,” he continued. “I don’t know if that’s going to give marina owners incentive to do it.”

Through Florida’s Save Our Homes act, homesteaded properties taxed at a value discounted by $25,000 cannot increase by more than 3 percent in value per year. The law, enacted in the 1990s, applies only to primary residences — not businesses or rental properties.

“Maybe in 2008 it’s going to be Save Our Businesses,” Nikolits said, noting he thought the 1990s act in Florida should have been similar to California’s successful Proposition 13 and instituted a cap that applies to all properties.

One thing is for sure: With the record-low Florida mortgage costs that led to the real estate boom, property values soared so high that the impact of the boom is still being felt. Clearly, something has to be done to ensure the growth of affordable housing and reasonable tax rates. Otherwise, Palm Beach County’s entire way of life could be jeopardized.