Florida Property Tax Quick Facts

We’ve talked ad nauseam about how costly Florida mortgage loans have become in the past few years. But if you live in the Sunshine State, you know it’s only half the battle.

Property taxes are rising every year, and becoming a bigger burden than many of the state’s current homeowners and new home buyers can bear. In order to understand what goes into property tax costs and how the system works, the Pensacola News-Journal put together the quick reference guide appearing below.

It should help you learn what exemptions there are, as well as what you can expect if you’re going to be applying for a Florida mortgage anytime soon:

The homestead exemption

Under current Florida law, property that is a person’s primary residence is exempt from the first $25,000 of assessed value in determining the annual property taxes paid by that individual. Example: For a home given an appraisal at $150,000, taxes are based on a $125,000 value.

“Save Our Homes” amendment

This voter-approved amendment to the state constitution limits property tax increases on a residence with a homestead exemption to 3 percent annually.

This is not portable, however. When you buy a home, even if it’s eligible for a homestead exemption, property taxes for the first year are based on actual assessed value, minus the $25,000 homestead exemption.

Notice of Proposed Property Taxes

Sent to all owners of Florida property each August. This notice details what the owner paid in property taxes last year to city, county, school district and other taxing authorities.

It also shows the next year’s proposed tax bill and gives the time and location of public hearings where the taxes will be voted on.

“Highest and best use”

Current state law requires property appraisers to base their assessments on the “highest and best use” of property, regardless of its actual current use. For instance, if a hot dog stand sits on property where a condo could be built, the property taxes would be based on the value of the land as if there were a condo on it.

Sales tax

Currently Florida levies a 6 percent sales tax to pay for state government. The local school districts have the option of asking voters to approve an additional half percent, and counties have the option of asking voters to approve up to another 1 percent. Currently, purchases in Escambia County are taxed at 7.5 percent, while Santa Rosa County purchases are at 6.5 percent and Broward County remains at 6 percent. Food and medicine are not taxed.

Income tax

While Floridians pay federal income tax, Florida is one of seven states with no state income tax. While this may appear to be a boon to consumers’ checkbooks, local governments are often inclined to raise taxes more to compensate for the state aid they’re not getting.

And when those local property taxes are tacked on to the Florida home mortgage payment you’re hampered with each month, that’s something you have to keep in mind.