Parklanders: Homestead your Primary Residence and take advantage of Portability!
I’m not sure why, but for some reason, the city of Parkland has a reputation of having high property taxes. Buyers often say to me, “I can look in Margate, Coconut Creek or even Coral Springs, but don’t show me Parkland. The taxes there are too high.” It is interesting to compare the four cities millage rates and see the inaccuracy of that assumption: Coconut Creek–21.29; Coral Springs–19.67; Margate–23.54; and Parkland–19.63. Yes, we have the lowest millage rate of the four communities!
None-the-less, property taxes can still be painful. However, in the state of Florida, we have the ability to cap our yearly tax increase to 3% and benefit from a tax-saving exemption on the first and third $25,000 of the assessed value of our primary residence. This exemption translates to a yearly savings of approximately $700-$1,000 for Florida homeowners! I’m amazed, when selling homes, how many people fail to apply for their homestead exemption…even after years of ownership!!
The filing process is simple–you can either visit the Broward County appraiser’s office or apply online at: www.bcpa.net. There are a few requirements–you’ll need to prove ownership (copy of recorded deed) and prove Florida is your permanent residence by providing your driver’s license, Florida I.D. Card, or Florida Voter’s Registration. Remember, you must own the property January 1st, in order to be eligible for any given year. The official filing period for 2011 was March 1,2010 through March 1, 2011, but you can submit a late application if it is submitted by September 19, 2011.
Effective July 18, 2008, Floridians moving from one Florida property to another, were given the ability to transfer the tax savings from their present homesteaded property to their new property. Essentially this means the savings we have accrued through our Homestead Exemption can be moved with us to our new home. We have two years after changing homesteads to transfer this savings, but it will only apply going forward, so it’s best to do it sooner than later!
Here’s an example, at the simplest level, of how it works. Let’s say you sell your property for $600,000, but because of your homestead, the assessed value at this time is $400,000. If you buy a Florida property which is more expensive–say $800,000–the difference between your real value ($600K) and assessed value ($400K) is subtracted from the real value ($800K) of the new property. $800,000 – $200,000 = $600,000. Now, for tax purposes, the assessed value of your new property is only $600,000 and any exemptions you qualify for will be taken from that figure. Basically, when you buy higher, the total difference is subtracted.
Using the same original home, let’s say you bought a Florida property which is less expensive…i.e. $500.000. We cannot take the total difference off ($200K) between our assessed and real value from the real value of our new home, but rather, we can take off the percentage it is of the real value–$200,000 is 33 1/3% of $600,000 so we can deduct $166,666.67 from $500,000, making our new assessed value $333,333.33. Ahah…when buying a less expensive property, we deduct the percentage.
Remember, in order to transfer your tax savings to your new property, you must FIRST apply for homestead for your new home. Parklanders, new and old, take advantage of your opportunity to homestead and/or move your previous savings….you DESERVE it!