AD VALOREM TAX APPEALS Click Here for Attorney Links
By definition, an ad valorem tax is a tax based on the value of real estate or personal property. Literally translated from Latin is means “according to value.” It refers to property taxes levied by local governments. General obligation debts are secured by an ad valorem tax.
The firm, Fox, Wackeen, Dungey, represents businesses and individuals in legal challenges against county property appraisers when the property appraiser’s assessed value of real and personal property is greater than the market value of the property. We also handle challenges based on Florida Statutory exemptions and classifications, such as homestead, agricultural, and pollution control devices. These challenges may first be brought before the county’s value adjustment board prior to litigation within the Florida Circuit Courts. We also offer various settlement strategy alternatives and guide clients through the selection of an expert appraiser to support a challenge when warranted. After the tax rolls close, legal challenges are time-limited, and if not resolved by mediation or some other means of settlement, the cases are decided in the courts. Because of the relative complexity in valuing property, this is a dynamic practice area in state circuit courts, appellate courts and the Florida Supreme Court.
If you do not feel that the property appraiser has fairly valued your property, please allow the attorneys at Fox, Wackeen, Dungey to work with you in presenting an effective appeal to the property appraiser, and if necessary, challenging the valuation in the court system.
Frequently asked Questions
How does the County Property Appraiser decide the Value of My Property?
County Property Appraisers are required to consider three approaches to valuing property: the cost approach, the income approach, and the sales approach. Although all three must be considered, the County Property Appraiser has the discretion to use whichever approach it deems most applicable.
Florida law sets January 1 as the assessment date each year for determining both value and exemption eligibility. Since January 1st is the date used for setting your assessed value for that year’s TRIM, (Truth In Milage), Notice, which is issued later in August, and that year’s tax bill, which is issued later in November, the value is based upon the market value for similar properties in the same or comparable subdivisions during the previous year, January 2 through December 31 (with the greatest weight given to sales from the final quarter of the year). Any drop in market values that occurred the year you have received your TRIM and tax bill will be reflected on your next year’s assessment and tax bill. Likewise, in a year when values increase, those increases will not be reflected until the tax bill the following year. Tax Year 2009 was the first time in which the Department of Revenue allowed foreclosure sales to be qualified in determining assessments.
What is the Value Adjustment Board?
Taxpayers who disagree with the assessed value, or denial of an exemption or classification, have a choice to challenge the Property Appraiser through a lawsuit filed in circuit court, or through an administrative process filed with the Value Adjustment Board (VAB).. The VAB is an independent board established by Florida Statutes (Chapter 194). Depending on the county, it is usually composed of a mix of City Council or County Commission members, School Board members, and appointed citizen members. The VAB is independent of the Property Appraiser's office.
What will be the procedure followed at a VAB hearing?
In most counties, the VAB appoints special magistrates to conduct the hearings on taxpayer challenges. The Special Magistrate is usually someone who is either a Florida appraiser, or someone familiar with the appraisal process and assessment process. Each county has its own rules regarding how the hearing will be conducted, but generally, all witnesses will be sworn in and the Property Appraiser’s staff will be given the opportunity to show that its office correctly developed your assessment; and you will be given the opportunity to provide evidence to the contrary. Often times, and depending on the property at issue, a taxpayer will be benefitted by introducing the testimony of his or her own appraiser, or land use planner, and any governmental regulations that encumber the property. After hearing all the evidence, the Special Magistrate may announce its ruling, or later send its ruling to you by mail, and later the VAB itself will review the ruling and decide whether to accept it.
Who must file a Tangible Personal Property return?
According to Section 192.001, Florida Statutes, "Tangible Personal Property" means all goods, chattels, and other articles of value capable of manual possession and whose chief value is intrinsic to the article itself. Inventory held for resale and household goods for the owner's personal use are exempt from taxation. While real property is not subject to taxation as Tangible Personal Property, many items such as signs, parking lot bumpers, exterior lighting, alarm systems and leasehold improvements are taxed as personal property. Any person or entity that owns or possesses Tangible Personal Property located in Florida, as of the January 1 tax assessment date, must file a DR-405 tangible property return with the Property Appraiser in the county where the property is (or was) physically located on the assessment date. Almost every business owner has some personal property to report, even if it is only supplies, rented/leased equipment or fully depreciated/expensed property. If your total tangible personal property is worth under $25,000 -- the amount exempted by law -- your initial TPP tax return is also treated as your application for exemption.
How May Property Qualify for Agriculture Classification?
To qualify land for the Agricultural Classification, an application must be filed with the Property Appraiser between January 1st and March 1st of the tax year. Only lands which are used for bona fide agricultural purposes shall be classified agricultural. "Bona Fide Agricultural Purposes" means good faith commercial agricultural use of the land. Once your application is approved, in most counties, the classification is automatically renewed annually. A postcard will be mailed to you each year alerting to you the automatic renewal and must be returned if the parcel is no longer in commercial agricultural use. If your property has some area used for agricultural use and some area not used for agriculture, then the property appraiser’s office may value that portion used for the agricultural in accordance with the classification, and value the remaining portion without the classification and instead assess that portion at just value.
What is the SAVE OUR HOMES amendment and Homestead Exemption?
The Florida constitution’s "Save Our Homes" benefit allows for a difference between the assessed value and market value of a homestead property due to an annual limit on increases in assessed value. Currently, the annual limit is an increase of 3% on your property’s assessment, even if the market value increases more than that percentage from the previous year. In 2008, a constitutional amendment was passed allowing for Homesteaded homeowners to transfer their existing Save Our Homes benefit to a new homestead, up to $500,000 or the same percentage of value, whichever is lower. This cap does not apply to any new construction, any previously non-assessed improvements, or to the new owner of a new or existing home the first year they are added to the tax roll.
In addition to the assessment increase cap, the Florida constitution’s homestead exemption mandates that every person who has the legal or equitable title to real estate and maintains it as his permanent residence (i.e., is a legal Florida resident) or as the residence of another person legally or naturally dependent upon the owner shall be entitled to $25,000 homestead exemption. In 2008, a constitutional amendment was passed creating an additional homestead exemption of $25,000 for home values above $50,000, but school tax levies are exempt from this exemption. To qualify for a Homestead Exemption, you must be a permanent resident of Florida as of January 1st. Applications are due before March 1st of the tax year. To apply, you should provide the property appraiser with the following information:
- Your Florida Voter Registration
- A Declaration of Domicile
- Your Florida driver's license
- A copy of your deed (and if the property is held in trust, a copy of the trust instrument)