While Florida has no state income tax, residents are still expected to pay real estate taxes. Though Florida real estate taxes depend on which city and county a home is located in, as a general rule, real estate taxes are generally higher in heavily populated areas that are experiencing rapid housing growth. This is attributed to the fact that city governments are compensating for unexpected and rapid growth by raising taxes. These taxes go toward increased services to accommodate a larger population, contributing to new and improved roads and infrastructure and funding police, medical, and emergency personnel and services.
While property appraiser’s offices are tasked with placing values on homes, they have no role in determining what the taxes will be. Appraisers figure out which value ranges buyers would deem reasonable for a particular property. In Florida, appraisals assess homes at “just values.” These assessments can range between 85 and 95 percent of the amount of the home’s contract price, but in most Florida counties, assessments are set at the lower end, often around 85 percent. While this lower end of the range is most common, it’s important to contact the local property appraiser’s office to determine their preferred target within the range.
The figures range around 85-95 percent to allow for transfer taxes, closing costs, and real estate commissions that may have been factored into the final sales price of a property but don’t necessarily represent the value of the home.
When it comes to taxes, the local Florida government determines taxes when establishing the millage rate. A millage rate, also referred to as “mil rate,” is expressed as “mils per thousand.” For example, if a mil rate was established at 25.00, then the homeowner pays $25.00 per every $1,000.00 of assessed home value.
Millage rates are established by each taxing district. By dividing the total budget of the district by the total taxable value of district real estate after exemptions are deducted, districts are then able to determine an appropriate rate which informs real estate taxes.
Before deciding on an area in which to purchase a house, it’s advised to contact the local property appraiser’s office to ensure district taxes will be financially manageable.
While real estate taxes vary throughout counties and cities, taxes in Florida are paid in arrears. As a result, there’s an opportunity for a small discount for early payments.