Think your property assessment is too high? File a petition to appeal.
First, get your petition filed on time. The deadline is September 18th in Dade and Broward County and September 14th in Palm Beach. Whether you try to do the appeal yourself or you engage a professional to do it for you, this is the first important step. Secondly, 80% of success is showing up! Make sure you complete the form in full and all information is correct.
To get a tax assessment for your property, the county appraiser will go through the process of the determination of the value. First, he or she will choose a land sale (hopefully in your neighborhood, but not always) on which to base your land value. Land evaluations can be tricky especially since some areas have very few land sales. Values can change from neighborhood to neighborhood or even from block to block. If the land parcel they choose has more value than your land, it can adversely affect your assessment. An assessment can be challenged by using either the tax assessor's method of adjusted SF or the traditional appraiser's method of "under air" living area. Whatever method is selected, it should be applied uniformly across the subject property and all the comparables. Do not use adjusted SF on the comps and living area on the subject property only. You must always compare apples to apples. Make sure your adjustments are plausible and you have data to back them up.
Aug 20, 2009
Jul 22, 2009
Property Tax Basics
The 2009 property tax assessments for Dade & Broward County have been certified and are now posted on the their websites. To view your property assessment, go to www.BCPA.net for Broward and click on "Property Search" on the top left, and then scroll down to accept the terms of use. For Dade, CLICK HERE.
You may search for a property by owner name, address, or folio number. Click on your choice, and enter the information. If you search by name, all properties owned by individuals with that name will come up, and you must click on the folio number of the property you wish to view.
When the correct tax comes up, below the name and address you will find "Property Assessment Values". The first line gives the 2009 assessed values. If you are NOT Homesteaded, the Just Value will be equal to the Assessed/SOH Value, and this is the value on which your 2009 property tax will be based. If you are Homesteaded, your taxable value is the Assessed/SOH Value, which is typically less than the Just Value. However, due to declining home values, the SOH Value can be equal to the Just Value.
The actual tax owed is still blank because the millage rates of the individual taxing authorities have not yet been determined. The following is the Budget Timetable:
August 4 - Ad valorum taxing authorities advise the Property Appraiser of their rollback rate, proposed millage rate, and time, date and place of the first required public hearing. Special assessment districts to advise Property Appraiser of their proposed rates.
August 11 - Property Appraiser begins to mail Proposed Property Tax Notices (TRIM Notices)
August 24 - Last day for Property Appraiser to mail TRIM Notices
August 24 to September 18 - Time to file petitions to the Value Adjustment Board (VAB) if you wish to challenge your 2009 Property Tax Assessment
September 3 to 18 - Ad valorem taxing authorities hold public hearings on tentative budget per Tax Notice. Dates and times of these hearings are listed on the TRIM Notices.
Within 15 days after adopting a tentative budget, ad valorem taxing authorities advertise intent to adopt final millage rate and budget. Public hearing to be held 2 to 5 days after published advertisement, after 5 PM if not on Saturday, no Sunday hearings.
Within 3 days after adoption of the final millage rates, ad valorem taxing authorities deliver the Resolution or Ordinance adopting the final millage rate to Property Appraiser and Revenue Collector.
Once the millage rates are determined and the Tax Roll certified to the Revenue Collector, the individual tax bills will be prepared for mailing in November. Even if you have filed a petition to the VAB or have engaged another person to do so in your behalf, it is recommended that you pay your tax bill on time. VAB hearings can go on for a year or more, and the property tax can become delinquent. If your appeal is successful, your excess taxes will be refunded to you.
Broward County officials have publically voiced their intent to keep millage rates down and try to control expenses. However, fees are increasing to make up for the shortfall caused by lower property tax assessments. As you have already heard, Code Enforcement has become more aggressive, and now drivers are even being ticketed for seat belt violations.
Land vs. Building
One last thing...Many people have been questioning the recent changes in the building values vs. land values on the tax records. The BCPA website explains why this was done:
"Starting with the new 2009 real property assessments, our residential land values and improvement (building) values are correctly apportioned. In the past -- because of the antiquated tax roll system this office had used for decades -- we were only able to set correct amounts for the total Just Value of a property, but the internal division of value between the land and the improvements was entirely arbitrary. Using mass-appraisal methods, we equalized land values this year by neighborhood -- not just by subdivision within a neighborhood. This means the square-foot land value for dry lots in a neighborhood should be the same as for other comparable dry lots in the same area ... lots along a golf course will be valued the same as other lots along the same golf course ... waterfront lots will be valued the same as other similar waterfront lots (and point lots valued the same as other nearby point lots) ... and so on. "
In times of declining property values, you should see your land value decrease while the building value stays relatively the same with an allowance for depreciation. The structure itself does not absorb the fall in value. The land does. This has been treated incorrectly on the tax records of Broward County over the past couple of years. It appears that this has been resolved by the recent corrections.
You may search for a property by owner name, address, or folio number. Click on your choice, and enter the information. If you search by name, all properties owned by individuals with that name will come up, and you must click on the folio number of the property you wish to view.
When the correct tax comes up, below the name and address you will find "Property Assessment Values". The first line gives the 2009 assessed values. If you are NOT Homesteaded, the Just Value will be equal to the Assessed/SOH Value, and this is the value on which your 2009 property tax will be based. If you are Homesteaded, your taxable value is the Assessed/SOH Value, which is typically less than the Just Value. However, due to declining home values, the SOH Value can be equal to the Just Value.
The actual tax owed is still blank because the millage rates of the individual taxing authorities have not yet been determined. The following is the Budget Timetable:
August 4 - Ad valorum taxing authorities advise the Property Appraiser of their rollback rate, proposed millage rate, and time, date and place of the first required public hearing. Special assessment districts to advise Property Appraiser of their proposed rates.
August 11 - Property Appraiser begins to mail Proposed Property Tax Notices (TRIM Notices)
August 24 - Last day for Property Appraiser to mail TRIM Notices
August 24 to September 18 - Time to file petitions to the Value Adjustment Board (VAB) if you wish to challenge your 2009 Property Tax Assessment
September 3 to 18 - Ad valorem taxing authorities hold public hearings on tentative budget per Tax Notice. Dates and times of these hearings are listed on the TRIM Notices.
Within 15 days after adopting a tentative budget, ad valorem taxing authorities advertise intent to adopt final millage rate and budget. Public hearing to be held 2 to 5 days after published advertisement, after 5 PM if not on Saturday, no Sunday hearings.
Within 3 days after adoption of the final millage rates, ad valorem taxing authorities deliver the Resolution or Ordinance adopting the final millage rate to Property Appraiser and Revenue Collector.
Once the millage rates are determined and the Tax Roll certified to the Revenue Collector, the individual tax bills will be prepared for mailing in November. Even if you have filed a petition to the VAB or have engaged another person to do so in your behalf, it is recommended that you pay your tax bill on time. VAB hearings can go on for a year or more, and the property tax can become delinquent. If your appeal is successful, your excess taxes will be refunded to you.
Broward County officials have publically voiced their intent to keep millage rates down and try to control expenses. However, fees are increasing to make up for the shortfall caused by lower property tax assessments. As you have already heard, Code Enforcement has become more aggressive, and now drivers are even being ticketed for seat belt violations.
Land vs. Building
One last thing...Many people have been questioning the recent changes in the building values vs. land values on the tax records. The BCPA website explains why this was done:
"Starting with the new 2009 real property assessments, our residential land values and improvement (building) values are correctly apportioned. In the past -- because of the antiquated tax roll system this office had used for decades -- we were only able to set correct amounts for the total Just Value of a property, but the internal division of value between the land and the improvements was entirely arbitrary. Using mass-appraisal methods, we equalized land values this year by neighborhood -- not just by subdivision within a neighborhood. This means the square-foot land value for dry lots in a neighborhood should be the same as for other comparable dry lots in the same area ... lots along a golf course will be valued the same as other lots along the same golf course ... waterfront lots will be valued the same as other similar waterfront lots (and point lots valued the same as other nearby point lots) ... and so on. "
In times of declining property values, you should see your land value decrease while the building value stays relatively the same with an allowance for depreciation. The structure itself does not absorb the fall in value. The land does. This has been treated incorrectly on the tax records of Broward County over the past couple of years. It appears that this has been resolved by the recent corrections.
Apr 15, 2009
Is Anything in Real Estate Recession Proof?
The Residential market is cyclical. It goes up and goes down and right now is the best time to buy investment housing due to the low prices and high inventory. The only problem is that residential lending is not what it used to be making it difficult to buy multiple homes. FNMA has increased the amount of homes one individual can own to 10, but after that your options become severely limited. Commercial lending on the other hand is still readily available. Regardless of where you live across the Nation, when the residential market is at its all time low Commercial is red hot.
The mortgage meltdown affects certain aspects of commercial real estate but not all… some properties are recession proof! So what types of Commercial properties are recession proof and why?
Apartments:
It’s natural to gravitate towards multi family Apartments when you first start out in commercial real estate. It’s a concept everyone understands “houses in a box.” When people loose their homes they need a place to live, the next place they go to is apartments.
Self Storage:
So what’s better than apartments with all that income from those tenants in one place? Self Storage, think about it it’s like having an apartment without the people, no toilets, no trash and no tenants to occupy the space just their stuff. When people loose their homes they transition into apartments and if you’ve ever lived in an apartment you know the closet space is limited and the storage space is even less.
Assisted Living facilities:
The next recession proof property type is Assisted Living facilities. It’s nothing more than giving assistance for people in need and most common the elderly. We all know the baby boomers are right upon us and the demand for assisted living is and always will be here.
Senior Living Facilities:
Are a lot like assisted living but much easier to manage. When people get older they either end up in assisted living as we just covered or they look to have a relaxed lifestyle and choose to occupy space in a senior living facility. This is a fifty five plus senior living facility with active seniors who want the done for you lifestyle.
Mobile Home Parks:
While not as sexy as the other types of property types (most people envision mobile home parks to be in bad areas with management stealing from you), people who loose their home in a recession and they cannot afford to move into an apartment will occupy a mobile home in a mobile home park. It costs much less than a home or apartment and because of that reason alone, it’s classified as a recession proof commercial property.
Why is Commercial Real Estate the all time wealth builder?
The reason is simple… cash flowing properties. There are four reasons to keep cash flowing properties and each one has its own separate benefit.
1. Cash Flow
2. Appreciation
3. Depreciation
4. Cash Out
Most investors purchase commercial properties for one main reason other than Cash Flow and its Appreciation. Unlike residential property, commercial property goes up in value much quicker and when the rents increase, the NOI (net operating income) goes up, when the NOI goes up, the value goes through the roof. Next, good old “Uncle Sam” will allow you to right off a portion of the property each year. This is a right off for wear and tear known as Depreciation. Cash out is a huge wealth builder. When you fill vacancies on a commercial property and keep it at market occupancy for just 180 days, this is called seasoning. Once you meet lender requirements for season, then you can do a Cash Out refinance using your new NOI.
Here’s the wealth explosion; you can pocket the equity in the property and not pay taxes on that money until you sell! That is unless you use a 1031 tax deferred exchange and roll it into another asset without having to pay capital gains ever ;-)
The mortgage meltdown affects certain aspects of commercial real estate but not all… some properties are recession proof! So what types of Commercial properties are recession proof and why?
Apartments:
It’s natural to gravitate towards multi family Apartments when you first start out in commercial real estate. It’s a concept everyone understands “houses in a box.” When people loose their homes they need a place to live, the next place they go to is apartments.
Self Storage:
So what’s better than apartments with all that income from those tenants in one place? Self Storage, think about it it’s like having an apartment without the people, no toilets, no trash and no tenants to occupy the space just their stuff. When people loose their homes they transition into apartments and if you’ve ever lived in an apartment you know the closet space is limited and the storage space is even less.
Assisted Living facilities:
The next recession proof property type is Assisted Living facilities. It’s nothing more than giving assistance for people in need and most common the elderly. We all know the baby boomers are right upon us and the demand for assisted living is and always will be here.
Senior Living Facilities:
Are a lot like assisted living but much easier to manage. When people get older they either end up in assisted living as we just covered or they look to have a relaxed lifestyle and choose to occupy space in a senior living facility. This is a fifty five plus senior living facility with active seniors who want the done for you lifestyle.
Mobile Home Parks:
While not as sexy as the other types of property types (most people envision mobile home parks to be in bad areas with management stealing from you), people who loose their home in a recession and they cannot afford to move into an apartment will occupy a mobile home in a mobile home park. It costs much less than a home or apartment and because of that reason alone, it’s classified as a recession proof commercial property.
Why is Commercial Real Estate the all time wealth builder?
The reason is simple… cash flowing properties. There are four reasons to keep cash flowing properties and each one has its own separate benefit.
1. Cash Flow
2. Appreciation
3. Depreciation
4. Cash Out
Most investors purchase commercial properties for one main reason other than Cash Flow and its Appreciation. Unlike residential property, commercial property goes up in value much quicker and when the rents increase, the NOI (net operating income) goes up, when the NOI goes up, the value goes through the roof. Next, good old “Uncle Sam” will allow you to right off a portion of the property each year. This is a right off for wear and tear known as Depreciation. Cash out is a huge wealth builder. When you fill vacancies on a commercial property and keep it at market occupancy for just 180 days, this is called seasoning. Once you meet lender requirements for season, then you can do a Cash Out refinance using your new NOI.
Here’s the wealth explosion; you can pocket the equity in the property and not pay taxes on that money until you sell! That is unless you use a 1031 tax deferred exchange and roll it into another asset without having to pay capital gains ever ;-)
Mar 24, 2009
Fed action sends mortgage rates below 5%
Less than a day after the Federal Reserve said it would double its purchases of mortgage debt, fixed rates on conforming 30-year mortgages fell well below 5 percent, and there's thought rates may stay there for a while. The last time mortgage lenders offered rates this low was 1965!
Mar 5, 2009
Obama's Housing Rescue Plan Simplified
Obviously there is a lot of information coming out of the Obama camp and getting the answers can be frustrating. After all, knowing that there is help out there means nothing if you don't know what that help is. I will try to simplify it as best I can:
The first part of the program, called Home Affordable Refinance, is aimed at homeowners whose property has lost value as housing prices have plummeted. It is only open to borrowers with conforming loans backed by Fannie Mae and Freddie Mac (no FHA, VA, or subprime). The program does not reduce principal, but rather allows the borrower to refinance up to 105% of the current value. Usual fees would apply, though for many borrowers the procedures would be streamlined. Unfortunately, since most values have doped over 40%, this program will help only a small amount of people in my opinion. Interested borrowers should contact their loan servicers to determine whether their mortgages are held or guaranteed by Fannie Mae or Freddie Mac. You can also contact me to determine what your home is worth if you are unsure.
The second program, called Home Affordable Modification, is more complex (and more interesting) and is aimed at borrowers whose mortgage payments have become unaffordable either because of a hardship such as job loss or illness or because the interest rate has been reset higher on an adjustable-rate mortgage.
For those borrowers, the government would provide cash payments and financial subsidies to help the lender lower the monthly payment to no more than 31% of the borrower's gross monthly income. In most cases the lender would reduce the interest rate on the loan to as low as 2% for five years. If that was inadequate to bring down the payment, the lender also could extend the term of the loan to 40 years or temporarily reduce the loan principal. In those cases, the set-aside portion of the loan principal would be repaid to the lender in a balloon payment when the house was sold or refinanced.
The 31% target income level would apply only to the borrower's primary mortgage payment; second mortgages, home equity loans and other consumer debt would not be included in that calculation.
However, administration officials said they would offer additional financial incentives to servicers to reach agreements with second-lien holders to accept partial repayment of those debts. Details of that policy are still being worked out.
To address the problem of borrowers who default again on mortgages, the government would provide additional payments to lenders and servicers the longer the borrower stays current on the loan. And borrowers would also see a benefit: For each of the first five years that they continue to pay the mortgage, the government would reduce the loan principal by $1,000.
And those whose interest rates are reduced below market value would see rates float back gradually after the initial five-year loan period -- at 1% a year, up to the market rate on the day the loan modification was signed. Interested borrowers should contact their servicers directly, administration officials said, and should pay no fees to access the program.
Finally, if neither one of these programs work for you, or perhaps you have an investment property, you still have the option to Short Sale it and spare your credit the stigma of Foreclosure...
The first part of the program, called Home Affordable Refinance, is aimed at homeowners whose property has lost value as housing prices have plummeted. It is only open to borrowers with conforming loans backed by Fannie Mae and Freddie Mac (no FHA, VA, or subprime). The program does not reduce principal, but rather allows the borrower to refinance up to 105% of the current value. Usual fees would apply, though for many borrowers the procedures would be streamlined. Unfortunately, since most values have doped over 40%, this program will help only a small amount of people in my opinion. Interested borrowers should contact their loan servicers to determine whether their mortgages are held or guaranteed by Fannie Mae or Freddie Mac. You can also contact me to determine what your home is worth if you are unsure.
The second program, called Home Affordable Modification, is more complex (and more interesting) and is aimed at borrowers whose mortgage payments have become unaffordable either because of a hardship such as job loss or illness or because the interest rate has been reset higher on an adjustable-rate mortgage.
For those borrowers, the government would provide cash payments and financial subsidies to help the lender lower the monthly payment to no more than 31% of the borrower's gross monthly income. In most cases the lender would reduce the interest rate on the loan to as low as 2% for five years. If that was inadequate to bring down the payment, the lender also could extend the term of the loan to 40 years or temporarily reduce the loan principal. In those cases, the set-aside portion of the loan principal would be repaid to the lender in a balloon payment when the house was sold or refinanced.
The 31% target income level would apply only to the borrower's primary mortgage payment; second mortgages, home equity loans and other consumer debt would not be included in that calculation.
However, administration officials said they would offer additional financial incentives to servicers to reach agreements with second-lien holders to accept partial repayment of those debts. Details of that policy are still being worked out.
To address the problem of borrowers who default again on mortgages, the government would provide additional payments to lenders and servicers the longer the borrower stays current on the loan. And borrowers would also see a benefit: For each of the first five years that they continue to pay the mortgage, the government would reduce the loan principal by $1,000.
And those whose interest rates are reduced below market value would see rates float back gradually after the initial five-year loan period -- at 1% a year, up to the market rate on the day the loan modification was signed. Interested borrowers should contact their servicers directly, administration officials said, and should pay no fees to access the program.
Finally, if neither one of these programs work for you, or perhaps you have an investment property, you still have the option to Short Sale it and spare your credit the stigma of Foreclosure...
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