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Chuck Roberts on What Homeowners Should Know About Miami Property Taxes

Posted On Friday, 06 September 2024 15:38
Chuck Roberts on What Homeowners Should Know About Miami Property Taxes Image by MustangJoe from Pixabay

Chuck Roberts is the Managing Director/Investments at Stifel and a distinguished figure in the luxury real estate sector. As the head of Stifel’s CR Wealth Management Group, Roberts brings a wealth of knowledge and experience to his leadership role. Residing in Miami Beach, he is deeply committed to his community, with a notable involvement in the Community Police Relations Foundation, reflecting his dedication to fostering positive community relations and civic engagement.

Roberts’ expertise in luxury real estate, combined with his strong connections in Miami, provides him with a unique perspective on blending professional success with meaningful community involvement. His approach to investment strategies and passion for giving back serves as a source of inspiration and insight for many.

Over the past few years, Florida has maintained its status as the most desirable US state for relocators, both domestically and internationally. This ongoing popularity has helped maintain the state as one of the top-performing real estate markets in the US, both in terms of residential and commercial real estate. Miami-Dade County, in particular, remains one of the hottest real estate markets in the US, with the market growing over 60 percent in the past five years. Over the past decade, the average home price in the area has increased by $340,000, with some communities, such as Palm Beach and Miami Beach, seeing astronomical increases of $6 million and $2.5 million, respectively.

One of the many factors contributing to Florida’s attractiveness to investors is its relatively low property taxes compared to the rest of the country. While the national average property tax rate is 0.99 percent, the average rate in Florida is 0.76 percent. However, it is important to understand that effective tax rates for areas within a given state can vary widely and are the result of a number of factors. Property taxes depend on the assessed value of the property, the millage rate established by local authorities, and any added taxes or levies related to local community services.

Miami-Dade County

 While Florida’s average tax rate is 0.76 percent, the effective tax rate in Miami-Dade is among the highest in the state, coming in around 2 percent. This reflects the relatively high value of the homes in the area, as well as the high standard of community services that are provided for by the tax (including public schools, infrastructure, transportation, water, municipal projects, The Children’s Trust, Okeechobee Basin, and Everglades CP).

Property taxes assessed in Miami-Dade fall into two categories—ad valorem and non-ad valorem taxes. Ad valorem taxes are calculated based on the assessed value of the property. In other words, the amount paid for a property valued at $1 million will be higher than the amount paid on a property valued at $500,000. These taxes are typically used to fund public services, including schools, public safety, and infrastructure. Non-ad valorem taxes, on the other hand, include service fees and special assessments charged for property-related benefits, including special taxation districts, community development districts, and property assessed clean energy districts.

Taking into account effective tax rates and the average assessed values of properties, some of the highest median property taxes paid in Florida include Miami-Dade County ($2,756), Broward County ($3,343), and Palm Beach County ($3,956). Naturally, this makes Miami one of the most expensive cities in Florida to own property in. Fortunately, there are a number of counties with easy access to Miami that have much lower effective tax rates, including Monroe County, Martin County, and Collier County. People working in Miami do have less-expensive residential alternatives.

Deadlines and Exemptions

In the state of Florida, property values are assessed on January 1 of each year. This is followed up by a notice of proposed property taxes, which is sent to each property owner by their counties’ property appraiser in August. Then, on November 1, the exact property taxes owed for each property are released (by mail and online). These taxes are due by March 31 of the following year. However, property taxes paid by November 30 (of the month of tax notice) receive a 4 percent early payment discount.

A number of property tax exemptions are available in the state of Florida. For example, the homestead exemption can lower the taxable value of a property by as much as $50,000. Other tax relief programs that provide reductions in the taxable value of real estate are available for seniors, veterans, and people with certain disabilities. Other possible exemptions include those related to religious and nonprofit organizations, government properties, and agricultural properties.

Property taxes can be contested by those who believe they have a legal argument through a formal appeal. This must normally be received within a certain period of time after delivery of the annual tax notice.

Relatively Low Tax Burden

 While the effective tax rate in the Miami area is quite a bit higher than the Florida average, it is relatively low on the national list of rates relative to home value. In fact, Miami ranked 137th on the most recent list, which is quite notable, considering it is one of the largest cities in the country, not to mention the country’s hottest real estate market. The tax burden is further offset by the fact that Florida does not have a state income tax. This has contributed to the appeal of the state for relocators, particularly those who work remotely and have the ability to choose their state of residence based on a variety of factors, including lifestyle, infrastructure and amenities, access to natural areas, and taxes.

Regardless of where a person chooses to own property, it is advisable to pay into a monthly escrow account that maintains adequate funds to cover any applicable property taxes each year. By establishing escrow accounts and educating themselves about the local property tax situation, property owners can ensure they are prepared for their annual out-of-pocket costs and are not surprised when their tax bills arrive.

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