The current tax issues are a hot topic, and rightfully so. I’ve had numerous comments and emails regarding the tax increases over the last couple of years and I decided to dedicate a post to all those who have sent in emails regarding this issue.
We are an out of state owner of a condo on the beach.The VALUE of our property has doubled! Great but there is no way if we tried to sell it would go for that. It has doubled the taxes. Our tax should be based on what we PAID for the condo NOT what the tax office thinks it is worth. If it sells for the assessed amount the new buyer should pay that amount. If they think it is worth so much than come on and buy it!
The “Mass” appraisal system does not work well when market conditions are so volatile. It works best in a market where changes are slower and gradual. Historically, the county offices have not needed to utilize the tools and data sources that could be very helpful in determining market/assessed values for ad-valorem tax purposes during these volatile times. Eliminating transactions that are not indicative of the current market [i.e., recorded deeds from sales contracts that took place 2+- yrs ago], applying financial feasibility to certain types of commercial transactions, and identifying and applying adjustments for market trends are a few tools / methods which could be helpful. Perhaps some changes will be made to the “Mass Appraisal System” that will incorporate the tools and data needed in times like this. The BCPA’s office has a tremendous task to complete, given the number of parcels, market conditions, and system limitations. Sure, it isn’t perfect, and that’s why the VAB is in place. Remember that government wheels move slowly but hopefully we will see some positive changes come from this situation.
Donald J Giles, MAI, SRA
Giles Appraisal Group, Inc.
Last year I was told by the tax commissioner they valued all beach front property at $25,000 per front foot plus all construction at $200.00 per SF. They did not consider location, lot depth, sewer availability, relativity to costal control line, zoning, height restrictions, or if the property could be rebuilt if it were destroyed. Cost of construction had no bearing because they valued all construction at $200.00/sf. Recent market sales were immaterial and they were not required to use them in their valuations.
I was also told that appeals were useless because the Appeals Board never over ruled their numbers.
This is our government at work. I think the work and “eye candy” the politicians throw out regarding lowering the milliage rate assumes everyone is an idiot. We all know the milliage rate has almost nothing to do with the tax bill compared to the erroneous valuations placed by the Tax Commissioner. I think we would all be hard pressed to find one person in Bay County that is convinced property values have increased in the past year. However, our Tax Commissioner thinks he can make the population believe property values have increased. I think it is time to get a Tax Commissioner with some common sense.
When I spoke with the Appraiser’s office, it was my understanding that the annual property tax is based on similar local property for only one year, the past year and that the way it is computed is set by the state legislature. So, one factor that would help mitigate the impact of a real estate bubble on property taxes would be to use multiple years such as the past 3 or 5 or 10 instead of just one year.
I think several factors will be required to manage the property tax rates to something reasonable such as:
- use 3 to 10 years of past date instead of just one year;
- adjust the mileage rate;
- put a cap on the percentage increase allowed from one year to the next;\
- other ?
Many months ago, Lee Sullivan and the Bay County Tax Watch, posted a chart in the News Herald outlining the “Actual Tax Levied” vs “Fair Tax” for calendar years 2001 thru 2006. I don’t know how many people actually paid attention to that chart – but, it was , perhaps, the most telling piece of paper I’d seen in a very long time.
Simply put – as our assessments kept growing – our elected officials did NOTHING to curb their spending habits. It’s PRETTY MUCH that simple.
Our millage rates remained constant from 2001 thru 2005 EVEN THOUGH OUR TAXES ROSE FROM $37.4M TO $70.0M during that same time … that’s a $36M tax increase!!! Almost 100%!!! Nothing changed until 2006, when their constituents (us pee-ons) became extremely vocal … when Bay Tax Watch was formed; and, when projected new taxes were discussed for 2006 – AGAIN to be raised!! It was only then that our county commissioners were nice enough to lower our millage rate by, what, 1 point? Are you kidding me? So, our millage rate was lowered … so what! Our taxes STILL rose another $3M that year as well!! And, we sat idly by!
No, my friends, the problem is NOT with the assessment process … Even if our assessments went up 400% … it was the local government’s RESPONSIBILITY to see that our millage rate was adjusted to allow for ONLY the collection of funds that were necessary to run our government … not, as they did, to continue the same millages and set-up new reserves, build thing we don’t need, and fatten government … Sure, as a politician, it’s nice to be able to tell folks in your district you were able to add sidewalks to their neighborhood, or bike trails, or cart paths. And, sure, it’ nice to be able to build a park in a place where none never existed before … and, I’m certain the betterment of our community was on each of our politician’s minds. However, it’s time to STOP! Time to give back! Local government has got to be reined in! Be vocal … stay in touch with our elected leaders … be involved!
Evan Brusilow, Principal Broker
WealthCreation NWFlorida, LLC