Hello all, I'm new to this forum, and am a new homeowner as of June 2009 in the state of Florida (zip 33009). I primarily reside in New York though and was previously unaware of Florida's laws and am taken back by this year's Property Tax because even though the value of my home decreased, my Property Taxes increased! This doesn't make sense to me!

Facts-

* My property is located in BROWARD county
* The official property appraisal states that the Assessed/SOH Value in 2010 is $165,820
* I bought the property for $160,000 on June 2010
* The 2009 Total Milage in Broward Country was 21.07590 which resulted in $835.36 in Ad Valorem Taxes
* According to bcpa.net/recaddr.asp the 2010-2011 value has decreased to $130,830

Overall, my property according to the county appraisal has lost value by $34,990 and is now worth $130,830.

Here is what I learned about SOH yet I am hoping someone can explain the logic of this law in plain english because I don't understand the point of it?

# The SOH amendment allows for your assessed value to not increase more than 3% or the Consumer Price Index whichever is less. SOH Difference is the difference between market value and assessed value.
# In years when property values are increasing, the SOH statute protects homeowners by limiting the amount of increase in their assessed value.
# However there is a downside to this amendment in a declining market.
# In most states, if property values deceased, then the property tax decrease by same %

As a former FLA resident, I can tell you the act (also known as Homesteading) was designed to protect full time residents from large real estate tax increases while penalizing non residents or snow birds.
Unlike many states, where property reassessments happen only every ten years or so, in FLA your assessment can change every year. If you decide to declare yourself as a full time resident (change everthing to your FLA address, including your car registration)you can go to the tax assessors office and file for homestead. You will need to provide proof and it must be done by the end of February for the current year. The homestead exemption becomes invalid upon sale or transfer of the property.

To give an example, our house in FLA was taxed about $1600 or so when we bought it and was only $2000 or so when we sold in 2006. The new owners real estate tax became about $3400 upon the sale. By homesteading, the tax assessment is reduced by $25000 and your real estate taxes cannot increase by more than 3% year to year. People living in some very old senior's condos often pay no RE taxes because the assessment is less than $25K.

The homestead exemption is now up to 50K in Florida; Florida's approved state contracts include a statement cautioning that taxes my increase and not to rely on the prior tax statment as new owners taxes will be calculated differently.

Thank you both for your replies. I guess I was looking at more of a layman's terms explanation of "why did my tax assessment go up when my property value went down?" . It would make sense to me that if property value goes up, property taxes go up. How does this make sense if it's inverted??

Also, I am a NY resident, and (legally) cannot change to Florida residency since I work (and get taxed) in NY. So is there any other way to save on my second home in FL?

Thank you in advance.

It's the government. You can't make sense out of non-sense!

You are correct, the system is flawed when there is a declining market after a quick upward increase in the market (but done intentionally). Here it is in a nut shell.

"Say a home had a market value of $300,000 but has a much lower assessed value of $200,000 — because the owner has for years enjoyed the 3 percent cap on annual increases in property taxes.

Now, because of the housing bust, the market value of the home drops 5 percent, or $15,000. The homeowner might reasonably expect to pay taxes on the lower amount, in this case, $285,000.

But the recapture rule demands that appraisers raise assessed value until it reaches the market value. So, our homeowner sees his assessed value increase by 3 percent, or $6,000, to $206,000.

How could Save Our Homes, designed to lower taxes, permit a tax increase at a time of falling home values?

In 1992, the 3 percent Save Our Homes tax cap became law.

But in 1995, Gov. Lawton Chiles approved a rule that applies during times of declining assessments. It requires property appraisers to raise the assessed value of a home until any tax benefit from Save Our Homes is eliminated. This is why it's called the "recapture'' rule: Government is recapturing revenue it lost due to the tax cap. The state Department of Revenue had asked for the additional rule to minimize the government's revenue losses under Save Our Homes."