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Dear Mr. Feichthaler:
I received the "Notice of Proposed Taxes" in the mail this week. A lot of numbers, and I don't know where to begin! Can you help walk me through what his all means? In addition to the taxes, it also shows my market value for last year and this year. It went up, but it isn't close to what my property is actually worth. Will a buyer give me less as a result?
--Lenny A.
Dear Lenny:
Every year, the Lee County Property Ap-praiser determines the value of EVERY property in Lee County, which amounts to hundreds of thousands of parcels. This is how market value is determined on the notice you received. Although our appraiser is excellent and usually very accurate, the values will typically be less, around 10% or so, than the actual value. And, keep in mind the appraiser is using sales data from last year, which could be significantly different than this year. The market value is the starting point for determining your property taxes. Although a buyer may point to this number as a justification for a low offer, it is not a valid basis for determining the value it will sell for today. Always get the highest price the market will bear!
Due to the fact property taxes, or ad valorem taxes, are based on the value of the property, having a lower value than actually exists is a benefit to the taxpayer. This taxable value is also reduced due to two main benefits to Florida residents. First, owners who are homesteaded in the property receive a discount on the valuation. The base is a $50,000 reduction, however additional reductions are available for disabled individuals, widows and others. Interestingly, the additional homestead exemption that was added of $25,000 does not apply to public school taxes, which also happens to carry the highest millage rate of all taxing authorities, at 5.55 mills. This means you are taxed at $5.50 for every $1,000 in taxable value.
The other major savings for Florida residents is the "Save Our Homes Benefit," which you may see in the "assessment reductions" section of the notice. Florida law caps increases in assessed value by 3% or rate of inflation, whichever is less. For many years after the recession, the cap was lower than 3% due to a historic lack of inflation in the 2010s. For those homeowners who owned their homes since at least 2012-2015, their capped values are very low, which results in a large Save Our Homes Benefit today. This tends to catch some new purchasers by surprise from out of state, when the prior owner is paying $2,000 in property taxes, and they pay $6,000 or more due to the removal of the cap.
Cape Coral residents will see 13 different taxing authorities, from the city of Cape Coral to the Lee County Mosquito Control District. All of these taxing agencies will have final meetings in September to officially adopt the rates provided in the notice. They can revise these rates lower, but may not increase them. So, if you are not happy about spending or the budget of one of these agencies, the date, time and place of the public hearing for each of the taxing agencies appears at the bottom of the notice.
If you are a new resident, you may not have homestead of any Save Our Homes savings. Be sure to apply for homestead through the property appraiser to start capping value and saving in property taxes. Occasionally, the taxable value is inflated compared to market value. This statement also provides information on appealing valuation. This can be done on an informal basis first, then an official appeal filed by Sept. 18, 2023.
Finally, note that this is not your final tax bill. That will be coming at the end of October or beginning of November. Unfortunately, city assessments will also be included on the property tax bill for stormwater, garbage collection and the fire assessment. The largest discount off the bill, at 4%, is available if you pay the bill in full in November.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.