Understanding the Proposed Tax Notice (TRIM)

In 1980, the Florida Legislature passed the Truth in Millage (TRIM) Act. This law is designed to inform taxpayers which governmental entity is responsible for the taxes levied and the amount of tax liability taxpayers owe to each taxing authority. The property appraiser sends this information, known as the TRIM notice, to the property owner.

Truth in Millage establishes the statutory requirements that all taxing authorities levying a millage must follow, including all notices and budget hearing requirements. The TRIM requirements also provide for maximum millage levies for counties, municipalities, and independent special districts. These requirements are prescribed by chapter 200 of the Florida Statutes.

The Property Appraiser’s Office studies the real estate market and reports what has happened to property values. The property tax is the backbone of local government and helps provide services such as police and fire protection, streets and drainage construction and maintenance, environmental regulation, libraries, streetlights, garbage pickup, and parks and recreation.

The taxing authorities, not the Property Appraiser, have control over the level of taxes, through the millage rate.

MARKET VALUE

The market value is the appraisal of what a willing buyer would most likely pay for your property (excluding costs of the sale). The property is assessed as of January 1, so the value reported is a reflection of the previous year’s real estate transactions and comparable property values in your area.

EXEMPTIONS

Your exemptions are deductions that apply to your property for Homestead or other special categories like those for disabled persons or seniors who meet certain income guidelines.

ASSESSED VALUE

Your assessed value is generally the market value limited by the Amendment 10 or “Save Our Homes” tax cap. This 1992 amendment to the Florida Constitution limits increases in the value of homesteads (your primary residence) to 3% or less per year.

TAXABLE VALUE

Your taxable value is the number the appraiser reports to the various taxing authorities and is the assessed value minus exemptions.

MILLAGE RATE

Taxing authorities calculate the annual tax rate, called the millage rate by dividing their total budget (their spending) by the total taxable value reported to them. The millage rate is simply a name for the rate, which the taxing authorities set in order to balance their budgets. Millage is a rate expressed in dollars per thousand (one mill just means you pay one dollar of tax for each $1,000 of taxable value).

Under Florida law, when a taxing authority sets a millage rate higher than the rate which would produce the exact same revenues as the previous year, they must properly advertise their action as a tax increase. This rate, which would result in no change in revenue, is called the rollback rate. As a practical matter taxing authorities are rarely able to adopt the rollback rate, since the cost of government services generally rises with the cost of everything else.

DATES TO REMEMBER

January 1 is the date that determines value; it is also the date for residency and ownership requirements to qualify for homestead exemption.

January 1 – March 1 is the normal filing period for Homestead and other exemptions such as widow/widower, disability, charitable organization, etc.

August Notice of Proposed Property Taxes, called TRIM notices are mailed to property owners mid-month. TRIM is an acronym for “Truth in Millage”. TRIM notices contain your taxing authorities’ proposed tax rates for the year, the locations and times for Taxing Authorities’ budget hearings, and the deadlines for filing petitions with the Value Adjustment Board.

The TRIM mailing starts the formal protest period, which is 25 days long. During the protest period, taxpayers can file formal notices to the county Value Adjustment Board to seek to have their assessment changed.

October Value Adjustment Board (VAB) hearings are held.

November Tax bills are mailed by the Tax Collector to all property owners of record.

FREQUENTLY ASKED QUESTIONS

Exactly how is my property value determined?

For taxation purposes, nearly all property has a value, including land, buildings, and tangible personal property used in business. By law, the appraiser must accurately determine fair market value (also called “just” value). To do that, standardized and accepted appraisal practices governed by Florida law, and the Uniform Standards of Professional Appraisal Practices are used. While sophisticated computer modeling techniques are used, they also periodically inspect all property. They consider:

• Recent selling prices of similar properties
• What it would cost to replace the property and how much depreciation is present.
• How much it costs to operate and maintain the property. (Commercial only)
• What rental income the property earns, if any.

What if I disagree with the Property Appraiser’s value?

Discuss it with the Property Appraiser and they will conduct an informal review. The review can be done any time during the year but most are soon after the TRIM mailing. After TRIM notices are mailed, you have 25 days to file a formal protest petition with the Value Adjustment Board.

So the Property Appraiser and Value Adjustment Board are not the same?

They’re completely separate by law. The VAB is the formal review board. An independent appraiser, called a Special Master, hears both sides and makes a written recommendation to the VAB. The VAB makes the decision. The value sought is always fair market value. Short of going to court, the decision of the VAB is final.

What does the “Save our Homes” or “Amendment 10” mean to me as a taxpayer?

This is a 1992 amendment to the Florida Constitution that limits the annual increase in the assessed (not market) value of homesteaded properties to 3% or the National Consumer Price
Index, whichever is less.

So Amendment 10 is a tax cap?

Not exactly. It’s a limit on the assessed value of the parcel. It’s not a limit on the taxes charged to the property. Taxes are a product of the value times the millage rates. The millage rate actually sets the tax level. Tax levels can change more or less than 3%.

What property is affected by “Save Our Homes”?

Only properties that have a Homestead Exemption.

What happens when I buy a new home?

The cap is removed anytime ownership changes. A new property owner should file for Homestead, which will establish a new value cap on your new home during January 1-March 1 of the tax year. You can file for a future year as soon as you buy a new home. If you already have Homestead and there is no change to ownership, your exemption automatically carries from
year to year. Other types of exemptions do require an annual filing.

Is the TRIM notice exactly what I can expect to billed for in November?

No, the TRIM notice is showing you taxes and exemptions, however, the full bill that you will receive in November will also include any special assessments, CDD’s, Solid Waste, etc that are
collected by the tax collector for your district.

If I am closing in September or October, why am I paying a full year’s taxes, plus escrows for next year?

Most lenders require that any taxes that become due and payable with sixty days of closing be collected and held by the title company until the bill is available in November. The title company will collect an estimated amount of taxes plus assessments from the buyer (Prior to November) and prorate the taxes between the buyer and seller as normal. The escrow amount
that you are paying is being sent to your lender in order to accrue for taxes next year.

How does my lender determine my tax escrow amount?

Most lenders use the prior year tax amount for the total amount to be escrowed. Lenders do not normally estimate tax increases, unless there is new construction. In November your lender will most likely pay your taxes regardless of the amount you have escrowed and then bill you for any shortages and readjust your escrow for the following year. Upon receipt of your copy of the tax bill or TRIM notice you may contact your lender to receive information on their policy regarding taxes.