Believe it or not, September is here and the football season is upon us!…. well maybe…hopefully? I am more excited than ever for the toe to touch the leather, as it will mean that things are that much closer to getting back to normal, or the new normal. However, all that glitters is not gold. With football also comes taxes. Yes, this is the time of year that County property appraisers across the state of Florida mail out Notices of Proposed Property Taxes, or TRIM (Truth in Millage) notices.
The TRIM notice explains how property taxes are calculated and shows property owners their just, assessed, and taxable values for the prior and current tax years. The notice also contains the two possible tax rates (or millage rates) to be used when calculating the property tax bill. One millage rate is based on the proposed budget that is set to be voted on, and the second millage rate is based on the prior year’s budget. The final millage rate is set by various taxing authorities once the final approved budgets for the current tax year are approved, which is typically sometime in September. The actual hearing dates and times for the budget meetings are provided on the TRIM notice if you are into that sort of thing. This explains why you see the following big bold letters on the TRIM notice (THIS IS NOT A BILL).
So what does this all mean to you and your upcoming closing? Well, if the closing is set to occur during that special time when the current year millage rate is not yet fixed, but current year’s assessed value is available, the FARBAR Contract forms provide that property taxes shall be prorated based upon the current assessment and the prior year’s millage rate. As a buyer, this information is important to keep in mind when the final tax bill is issued in late October. This is especially so if the final approved budget results in a higher millage rate than the millage rate that was used when prorating the property tax on the settlement statement.
Fortunately, the FARBAR Contract forms also contain a provision that provides for the property tax proration to be readjusted, at either party’s request, if the tax proration was based on an estimate, and the provision specifically survives closing. As always, please contact your local real estate attorney should you have any questions with respect to property taxes or the tax proration used in your closing.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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