I was out with some customers today, and they were asking me about the property taxes on a home they were interested in. I mentioned what the millage was for the county, and they said they did not understand what that word meant. Millage is a part of the equation local governments use to determine how much property tax you are required to pay. Like millipede and millenium the first half of the word is related to "thousand". For tax purposes, the millage is what you pay for every $1,000 worth of assessed value the county property appraiser feels your home is worth.
Here is how it works. The county property appraiser puts a value on your home using specific criteria. The result is called your home's Assessed Value. It is supposedly near to the true value, but often is not. For example, I bought my home last year for $98,000 yet the assessment was set at $59,000. Not sure why, but I am not going to argue the point. Most homes I see are assessed at less than what I could sell them for. Once the assessment is set you will pay the millage (or one mil) for each $1,000 of assessed value as your yearly property taxes. Here is an example for a home with an assessed value of $210,000 in an area with a millage of $15:
$210,000 ÷ 1,000 = 210 thousands
210 X $15 millage = $3,150 Your yearly property taxes
Of course, the millage is usually an odd amount like 15.932, but the calculation is the same.
Your millage will vary depending on where you live. Here in Pasco County, if you live in the unincorporated areas of the county your taxes will be less than if you lived in cities like Zephyrhills or Dade City where you will have a higher millage since you have city services.
Now, to add to the confusion, in Florida we have several exemptions that you may qualify for if your home is your permanent HOMESTEAD property. If it is, then you can deduct at least $25,000 from your home's assessed value. This is called the Homestead Exemption, and your taxes are calculated using that amount. Changes have also been made to allow you to deductt another $25,000 if your home is worth at least $75,000. The assessment between $50,000 and $75,000 is exempt, except for its use to calculate school taxes. It can seem confusing at times, but in the end it means you save a little more money each year.
Other exemptions for low income seniors, disabled veterans, etc exist. You can read more about these exemptions and how to apply for them at my website where I have placed links to the county property appraisers in our area. Just go to: www.jelwell.century21bnr.com and click on the County Property Appraiser button.
People who buy homes here should not rely heavily on a home's current tax bill. Our updated contract forms even refer to this in their terms. There may be exemptions in place that you will not qualify for, the assessment could go up or down, and the millage varies from year-to-year. So there is 0% chance that the sellers' taxes will be your taxes. You might actually pay less! But one thing is for sure about property taxes. They will change!
In addition to the exemptions, we also have something called "Save Our Homes". This was enacted in 1992 to prevent people from losing their homes due to the fact that their home's assessed value had risen so high that they could no longer afford to pay the taxes. Save Our Homes limits yearly increases of a homesteaded property's assessed value to 3% or the Consumer Price Index, whichever is less. For people who have lived in a home for many years this will make their taxes look very low. Something to keep in mind if you are thinking of buying a home from owners who have lived in it for many years. When the home is sold, the assessed value will rise immediately to the real assessed value that the county property appraiser has set for the home. As a result, the taxes the new buyers will pay may be substantially higher than those of the previous owners.
If you have further questions, contact you county's property appraiser's office. I am sure that their personnel will be more than happy to assist you!
Hope this has helped clarify things a bit.
John Elwell - REALTOR at CENTURY 21 Bill Nye Realty, Inc. 813-783-4444 or e-mail: jelwell1@tampabay.rr.com Licensed in Florida.
