Q: What is the number one question your office is receiving now that tax bills have been mailed?
A: The number one question I receive is from people who call and say that their tax bill has increased, sometimes dramatically. Dramatic increases are almost always because the person has bought an existing home in the past year and they are comparing their taxes owed to the taxes owed by the previous homeowner.
Q: How does this happen?
A: It has to do with assessment limitation caps, particularly as it relates to residential properties. If you own a home in St. Johns County, you pay property taxes based on the value of your home. In St. Johns County, the last few years the value of the home has likely increased and it will likely continue to increase. As this value increases, so does the property tax, without regard to tax rates.
If your property is homesteaded, the most the assessed value can increase is 3 percent and if the property is not homesteaded, the most the assessed value can increase is 10 percent. The tax rate is then applied to the assessed value. There is sometimes some confusion on the part of the taxpayer that the cap is the amount of taxes, but it is actually on the assessed value.
Q: What about the dramatic increases you mentioned earlier?
A: Each of these assessed value caps accumulate over time. The homestead exemption cap is also known as Save Our Homes and has portability, so it may be taken with you to another homestead with certain limitations. (Non-homesteaded caps may not be taken with you.)
So, if you buy an existing home, the caps accrued are to the seller and will auto-reset on January 1 of the following tax year. When estimating your future taxes, it’s very important to look at any accumulated caps that the previous owner may have, because they will be removed when you become the new owner.
Q: What is the best way for our readers to contact you?
A: Our office is located at 4030 Lewis Speedway Ste. 203, (904) 827-5500. It is open Monday – Friday, 8:30 a.m. – 5 p.m. Also, readers can email me at Eddie@sjcpa.us or call me at (904) 827-5500.
