Wednesday, 03 November 2010 07:24 Rochelle Le Cavalier
Last year, the assessed value of my house was almost double what houses on my street were selling for. My taxes went up, even though the market was way down. This year, my property taxes actually went down as prices are more stable, which was a welcome relief. But this has me wondering, will we get another break in 2011? D`How do they come up with the “Assessed Value” anyway and how often do they update the figure?
Stressed about being assessed
It has taken a while for the Broward County Property Appraiser (and every other property appraiser, by the way) to catch up the “assessed value” to current market conditions.
Historically, the Florida Department of Revenue (DOR) held that foreclosures should not be used as comparable sales for assessment purposes. Until very recently, property appraisers would only qualify a foreclosure sale if the property was listed for sale on the Multiple Listing Service (MLS) open market listings and the property was in normal to good physical condition, which was rare.
Tax Year 2009 was the first time in which DOR allowed foreclosure sales to be qualified in determining assessments. Many real estate professionals believe, and the DOR agrees, those MLS-listed foreclosure sales qualify as arms length “normal market condition” sales under the current recessionary economic conditions and reflect market values. Today’s market includes many foreclosed properties that are in excellent condition.
If you purchase a property in a foreclosure, your actual purchase price may not reflect the market value used for determining your taxes. It may be higher or lower. Short sales are also newly being included using the same criteria as for foreclosures.
Regardless of the purchase price, assessments in Florida are done a year in arrears. This means your 2009 assessment was based on the sales in your neighborhood (excluding non-arm’s length transactions and other “disqualified” transfers) between Jan. 2, 2008 and Jan. 1, 2009. Any change in sale prices between Jan. 2, 2009 – Jan. 1, 2010 is reflected on your 2010 assessment. Any drop in value after Jan. 1, 2010, will be reflected in your 2011 assessment.