The Real Deal Miami

Tax attorneys say every home over-assessed

By Rachel Gomez | August 10, 2009 03:05PM

South Florida property tax attorney Seth Lubin gets calls daily from distressed New Yorkers looking to appeal the property taxes on their South Florida vacation homes.  
 
“They have a good reason to be complaining,” he said.
 
Though property values have plummeted, snowbirds likely won’t see the tax reductions they hoped for. 
 
At the same time, full-time Florida residents legally protected from rising tax rates by Save Our Homes, a 1995 property tax limitation, are sill seeing their taxes increase. This is because local lawmakers are voting for higher millage rates — the tax rate per $1,000 of property values — to counteract the low market values.
 
Lubin of the Weston law firm Lubin & Lockwood, P.A., says a survey by the national taxpayers union shows some properties may be over-assessed by as much as 60 percent of their “true” value. That’s because county tax appraisers often base their assessments on historical values rather than reflecting current, post-real estate boom economic conditions. South Florida is no exception.
 
“They don’t have the manpower to put every house under a microscope,” says Jacob Sharff, co-owner of Real Estate Property Tax Fighters, a company specializing in residential property tax appeals in Miami-Dade, Broward and Palm Beach counties. “Everybody’s home is over-assessed. It’s just amazing how flawed a system it is. Market value is based on last year, and prices have fallen so it’s really worth less.”
 
Sharff, who started his company with his partner in 2008, said there were almost 100,000 appeals in Miami-Dade County last year. 
 
Although Dade County was hit with a 28.4 percent decline in market value in 2008, its total taxable value dropped only 13 percent. Broward County’s Home Value Index declined 24.2 percent, yet taxable value fell by only 10.7 percent. These numbers are slightly worse than the average market value decline in Florida last year, which was 23.3 percent.
 
Even those who haven’t seen their taxes increase by more than 3 percent during the boom years could soon see a noticeable hike. In past years, year-round Florida residents benefited from Save Our Homes, a state provision designed to limit the amount property taxes increase. However, it doesn’t protect these residents from adjusting millage rates when property values are low. 
 
High property tax rates could pose an issue for retirees who have a fixed monthly budget.
 
“The people with Save Our Homes are going to see prices go up,” said Jack McCabe, CEO of Deerfield Beach-based McCabe Research and Consulting. Though it seems local lawmakers are raising taxes and insurance rates at the worst possible economic time, some real estate analysts don’t believe it will drastically affect home sales one way or the other.
 
“Property taxes were an issue in the last few years because combined with insurance it was like a second mortgage,” said McCabe. “Now it’s not so much an issue.”