The Real Deal Miami

Tax legislation a boon for property owners 

By Jennifer LeClaire | June 25, 2008 04:43PM

Assessments will become more equitable when a new law takes effect on Sept. 1, officials at the Florida Association of Realtors say. 

After a raging debate that saw some commercial developers leave the state and others consider an exodus, Goveronor Charlie Crist signed the bill, HB 909, into law last week, creating a new property assessment standard.

The old method caused “a lot of problems in counties across the state,” said FAR Public Policy Representative Trey Price. “HB 909 helps to clarify how appraisers interpret the statues.” 

Before HB 909, appraisers could interpret the Florida statutes in dramatically different ways. While Broward County Property Appraiser Lori Parrish applied the statute based on current use and kept the businesses’ revenue in mind, for example, Palm Beach County Appraiser Gary Nikolitis assessed a property value based on its maximum potential to generate revenue. The latter scenario is known as “highest-and-best use.” 

That means Parrish would assess a marina in its current use — as a marina. Nikolitis, on the other hand, would assess a marina as a high-rise condo. While HB 909 mandates Florida retain its highest-and-best use standard, what constitutes “best use” has been clarified. For property tax purposes, best use has to abide by reasonable and fair standards. 

The new legislation limits property tax increases based on “current use” to “the legally permissible use of the property” and specifically excludes a higher taxation value if the use requires any zoning changes, concurrency requirements or permits necessary to achieve the highest-and-best use. 

Christina Morrison Pearce, a realtor at Southdale Properties, Inc., a residential and commercial brokerage in Lake Worth, is relieved.  

The law will stop the Palm Beach County tax appraiser from using only highest-and-best use as a form of valuation for commercial property without taking income or current use into consideration, she said. 

“The appraiser’s interpretation of the law has so negatively impacted rental affordable housing providers and commercial property landlords that’s really put a damper on our market,” Pearce said. “This should bring some relief later this year and next year.” 

When the law takes effect in September, residents will gain a louder voice in property assessment as the make-up of county value adjustment boards (VAB) changes. The new standards call for adding a local homesteaded owner and a business owner occupying commercial space in the school district. Other spots go to two members of the county governing body and one member of the school board. 

“School board members and county commissioners don’t have lowering someone’s property tax bill at the top of their agenda because they benefit from the revenues property taxes generate,” Price said. “Removing one school board member and one county commission is a good step in reforming this process.”