Understanding Florida Real Estate Taxes with Florida’s Amendment 1

Trying to determine your Florida real estate taxes is like trying to determine if you qualify for an IRS tax break, near impossible. If you’re trying to understand Florida property taxes this article explains everything you want to know, but were afraid to ask, including information on Florida’s New Amendment 1 passed by voters on January 9, 2008. So whether you’re a new Florida resident wondering what a homestead exemption is, or a longtime resident trying to figure out how much Save Our Homes benefit you can take with you to your new home, it’s covered in this article.

Florida’s real estate tax laws can be tricky to understand. There are several factors which affect the size of your property tax bill,Guest Posting so if you’re buying property in Florida or are relocating, it’s important to understand how taxes are calculated.

Property values are in constant flux just as the real estate market is, so getting an accurate, current assessment is important. The assessed value of the property you buy may change dramatically when it changes hands, so it’s good to be aware of the factors that might influence how much tax you pay.

As well as market rates your real estate tax bill will also depend on the tax rate for different local government bodies. The property you buy will be subject to taxes from several different bodies, including county and city government, the school board, hospital district, and water district. There may be additional taxes if you live in a masterplanned community.

On the other side of the coin, homestead exemptions and the “Save our Homes” amendment help limit the amount of your property tax bill.

County Taxes

The amount you pay in county property taxes will, of course, vary depending on the value of your property. However, they’ll also vary depending on the tax rate in your county, and where in the county you live. This is because within a county, some regions are incorporated and some are unincorporated, and unincorporated regions tend to have lower property taxes. If you live in Temple Terrace, some areas of New Tampa or the City of Tampa, for example, you’ll likely be paying more in property taxes than someone living in Lutz or some portions of New Tampa, as the former locations are incorporated and the latter are not. Unincorporated areas generally are lower because they do not have “city” taxes.

Community Development District Tax

People living in a Florida masterplanned community or community development district will likely have additional taxes to pay. These extra taxes are what enable the developers of these communities to add extra amenities to enhance the lives of residents. By sharing the cost of community and land development among residents, additional facilities such as recreation centers, parks, walking trails, and sports facilities can be added.

Depending on the community, the tax may have two separate parts. One is a fixed amount that is payable for a fixed amount of time (usually no more than twenty years) – the bond portion. The second amount can vary from year to year depending on the needs and budget of the community. If you’re interested in relocating to one of these communities it’s important to find out how much residents are expected to pay each year, as the total varies widely depending on the community, the different villages within the community and the types of facilities and services the master planned community provides as a whole.

Note that the responsibility for paying these taxes is tied to the property, not to the owner. If the property changes hands, payment of community fees and taxes becomes the responsibility of the new owner. An owner does have to option to pay off the bond portion of the CDD for their property, thus reducing the amount owed yearly to only include the working capital needed to maintain the community.

Property Tax Homestead Exemption

Under the homestead exemption, all legal residents of Florida can deduct $25,000 from the assessed value of their primary residence. This essentially reduces the taxable value of the property, and reduces how much eligible Florida residents pay in property tax. Certain groups of homeowners, such as senior citizens, veterans, and the blind, may qualify for other exemptions.

The $25,000 homestead exemption is not granted automatically, however. To be eligible in any given year you must take possession of the homestead by December 31, and then apply for exemption no later than March 31 of the next year.

Since January 9, 2008, eligible Florida homeowners can gain a further $25,000 exemption under Amendment 1. This exemption is received automatically by any homeowner who applies and is approved for the original homestead exemption.

The second exemption is calculated as follows:

The first $25,000 value of the home is the original exemption.
The second $25,000 is fully taxable. This is necessary to allow Florida towns and cities where assessed property values are low to continue collecting the revenue they need to run local government.
The third $25,000 is the new Amendment 1 exemption. It is exempt from all taxes except for school tax. This allows schools to continue receiving the funding they need (if this

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Where Does Your Money Go? Taxes

Trying to stay within the theme of Budget Stretcher, I thought a series of articles on knowing where your money is going may help some of you understand just how much you pay on certain expenses.

I’ve decided to start this series of articles with information about the amount and type of taxes you pay. I won’t be able to cover all of the types of taxes that are paid by Americans because that would turn this article into a book. I’m just going to list a few of the most common taxes that most of us have to pay.How much do you pay in taxes every year? I can bet many of you don’t have any idea. You may think you can just look at your tax forms for last year and have the answer. I guarantee that would be just the beginning.Just take a look at the below list of various taxes and do the math yourself:Federal Income Taxes – Uncle Sam is currently taking between 15% and 39% of our Adjusted Gross Income to pay for what ever it is that they spend money on in Washington. The main point I want to make here is that many people feel that because they received a refund,Guest Posting they didn’t pay any taxes. For some people, this is true. However, the vast majority of people that receivea refund are just getting back the money they already paid in through withholding, minus the taxes they owed. HOW MUCH DID YOU PAY LAST YEAR?Income Tax Preparation – Yes, I consider the cost of having our taxes prepared by a professional as a tax. If the federal tax code was published in english, maybe more of us could prepare our own taxes.Social Security – 15.3% of your income goes directly to the federal government for social security and medicare and is conveniently deducted from your paycheck. The myth about your employer paying half is just that. If you weren’t required to pay social security, that is another 7.65% that your employer could pay you.Sales Taxes – Unless you live in a state that doesn’t have a state sales tax, this costs you around 6% to 7% of every penny you spend. Wouldn’t it be nice to buy something for $99.95, hand the clerk a $100 bill and get a nickle back.Property Taxes and Real Estate Taxes – These taxes can run intothe thousands of dollars a year. I know, there are some places you aren’t required to pay these taxes either, however, you can bet they get this money in other ways. Before you renters start smiling, remember that your landlord has to pay these taxes. Want to guess where he gets the money?The Other Guys Taxes – What do you mean “The Other Guys Taxes”? He can pay his own. For each item you buy, the manufacturers and distributors have expenses like the cost of production, packaging, shipping, etc. They also have to pay taxes. Who do you think actually winds up paying these expenses? If you buy it, you do. I have seen estimates that between 20% and 25% of the cost of most items is for taxes that they have to pay. To make a profit, all companies must pass all expenses they have along to the consumer.Gas Tax – With federal gasoline taxes over 18 cents per gallon and state gasoline taxes as high as 35 cents per gallon it isn’t hard to see that, with the price of gas currently under a dollar in most places, over half of the cost of your gas could be going for taxes.Self Employment Taxes – This is simply the way a self employed person pays their Social Security and Medicare. They are required to pay 15.3% of their gross income to cover these expenses. These are the people that really know how much taxes they pay. This is because they are required to write a check for them four times a year and, if they underpaid throughout the year, they may have to write another check on April 15th.When you look at your budget and wonder where all of your money is going, you may want to consider what you are paying in taxes. There are taxpayers in this country that are paying over 50% of their income in one tax or another.Here are links to a couple of other articles I’ve written on

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