Rapidly rising property values are bringing a tax windfall to cities and counties throughout Florida for the upcoming fiscal year.
Higher assessed values and new construction are pushing up overall tax rolls. For example, Osceola County’s tax roll jumped by 10.7%, Orange County was up 9.2%, Seminole County increased 8.2%, and Lake County was 7.3% higher.
It’s occurring just one year after voters approved a constitutional amendment limiting assessed value increases for non-homestead property.
Amendment 2 was touted as a solution to skyrocketing business property taxes. It made a temporary 10% cap on annual assessed values permanent. Non-homestead parcels include second homes, rental properties, non-residential properties such as commercial real estate, and vacant land.
The property value limits do not apply to local school district taxes. The limits also do not apply if the property changes hands or if it undergoes substantial improvements.
The measure was approved by 67% of voters. At the time, opponents argued that since only a limited number of taxpayers would benefit, it would create more inequity in the system. Amendment 2 does nothing to prevent tax rates from increasing.
Rates are Key
Politicians often claim they’re not raising taxes because they’re not raising tax rates. However, property taxes go up in a growing economy even with the same tax rate.
Most Florida governments plan to maintain the same tax rates and some are considering slight rate reductions. Others have tentatively set their property tax rates higher, which means they will reap even more tax dollars.
It’s not unusual for tax entities to set an initial tax rate that is higher than what officials ultimately intend to approve. This gives them a cushion during budget planning sessions in case extra tax dollars are needed.
The 2019 tax rates will be finalized in October just before the issuance of tax bills by November 1st.