Understanding Property Tax
An Important Revenue Source
Property tax is an important source of revenue for most governments in North America. Taxes help local or municipal governments take care of their communities, among other things. Whether we like it or not, the property tax is here to stay.
Property tax is a major expense for homeowners in Florida and is worth knowing a bit about. Understanding tax helps you not only understand how it’s calculated but allows you to estimate your current and future bills.
How is Tax Calculated?
Tax is calculated largely based on the assessed value of a property. The amount you pay is determined based on the local rate determined by the municipality, a percentage multiplied by the value of your home. However, some properties such as historic homes, religious buildings, and homes owned by veterans may qualify for exemptions. A Fort Lauderdale real estate lawyer can help you determine your legal rights, and challenge your property tax assessment, if necessary.
The value of the assessed property also depends on what it’s being used for. Homes have different tax rates than commercial properties, such as farms and office buildings, among others. If you are procuring income from a property you own, this will typically be taken into consideration when determining the annual amount of tax owed.
What is Property Tax Used For?
Taxes are one of the ways governments raise money for operations. Different types of taxes are used by the various levels of governments for different purposes. Property tax is typically used to fund public institutions, such as schools, libraries, and colleges, pay public servants, build and maintain parks and recreation spaces, and any other service that benefits the whole city or community.
Property Tax in Florida
For decades, Florida’s overall tax burden has been considered one of the lowest in the country, according to non-profit research organization, the Tax Foundation. Florida has no income, estate, or inheritance tax, but it does have property tax. The average property tax rate in the Sunshine State is about 1 percent – slightly below the national average. However, exact property tax rates are determined by jurisdiction.
Fort Lauderdale has had a relatively stable property tax rate over the last decade. Broward County, which includes Fort Lauderdale, has a tax rate of about 1.2 percent – higher than some areas of the state, but significantly lower than the highest rate in the state: 35 percent in Gainesville. High rental prices and occupancy rates can help offset this expense.
To learn more about taxes for different types of properties, give our South Florida residential real estate attorney a call today at (954) 779-7009.