What Happens to my Taxes?

As home prices implode, tax assessors must revalue properties down, taxes (should) follow, next.  As a general rule: City and County assessors reappraise property values annually or biannually.  They use recent sales of comparable homes in the neighborhood to set these values.  This means that in areas that have seen significant drops in home prices and appraisals thereby property taxes - should also drop.

Unfortunately, Property Assessors have been flooded with requests from recent homeowners to reassess their home values, delaying the process.

Be aware, that even if tax assessors reduce appraised values to reflect market conditions it still does not automatically mean a property tax cut. Our cities and counties could still raise the tax rates (millage rate), [the percentage of the home's value that is used along with the assessed valuation, to calculate the final bill].

Bill Donegan (property appraiser for Orange County) has stated that, "Taxes are based on property values times the millage rate.

Central Florida has declining values but could make up for it by raising the millage rate.  Local governments usually can't just raise rates indiscriminately, but could raise the fees on water, sewage and other services to keep up with looming budget deficits. 

Another option to keep revenues up to pay for programs is to create entire new taxing entities, known as "tax district", to fund fire departments, law enforcement, even libraries.

Lee Rosa is an ABR® Specialist in Orlando, Florida. You can search Orlando Homes for Sale at his website.