South Florida Sun-Sentinel (Sunday)
Higher tax bills could be coming
Blame the red-hot housing market
One year into the COVID-19 pandemic, you’re about to see an unexpected toll: a higher tax bill.
Property values are skyrocketing across South Florida, which means taxes may rise for most people next fall even if governments keep the same tax rates.
Here’s what you should know:
How much have property values gone up?
In Broward County, home values rose 4.3% from the last year.
“Residential properties are very, very strong,” says Marty Kiar, Broward County’s property appraiser. The median single-family home sale in January 2020 was $392,250, and a year later the median was $445,000 — a $52,000 growth he called “pretty incredible.”
When the numbers are finally calculated for this coming year, the increase in values could be closer to 2.8%. “But the one thing we can safely say, no matter what, even in the worst-case scenario, the county will likely see an increase in taxable value for this year,” Kiar said, since every city in Broward has an increase.
Palm Beach County’s early projections show values have increased at least 5% since last year, Tim Wilmath, chief appraiser, said through his spokeswoman.
“We anticipate the residential values will increase for the 2021 tax roll as we have seen robust activity in both single family homes, town
homes and condos,” he said in an email, although some commercial property values will drop, such as hotels, movie theaters and some restaurants. Fast-food joints, however, did fine during the pandemic and might not be included.
Similarly, Miami-Dade County is seeing an increase of sales prices, which means higher values, said Deputy Property Appraiser Lazaro Solis.
Numbers are still being crunched, but “we have seen a continued increase in single-family homes,” he said.
Why is the market so hot?
With more people working from home and reconsidering where they should live during the pandemic, many out-of-towners are scooping up homes across the region. Some of the growth is spurred by a significant number of newcomers who’ve moved to South Florida, Kiar said.
“It’s every single day,” he said of new residents who visit his office. “The people coming down and buying these properties are really driving these values to where they are at this time.”
The number of new homebuyers is called the “COVID surge,” said Bill Barringer, the county’s director of Real Property. “You’re getting all these people starting to flood in to cause these sales to possibly increase [prices and values] in these subdivisions.”
That’s for homes but not necessarily businesses, though.
Some offices are empty because people have been working from home. “We know retail took a big hit this year,” as people turned to online shopping, Barringer said. And there have been gyms that closed due to restrictions and those buildings are now empty.
“Commercial is on this big roller coaster,” he said.
Broward Vice Mayor
Michael Udine said he knows of people trying to capitalize on values and sell “because the property values have gone so astronomically through the roof,” he said. “The problem is there’s nowhere for them to go if they want to stay in Broward County.”
When will I get my tax notice?
South Floridians can expect to get their property tax notices by August.
Over the summer, property appraisers begin giving property value estimates to each city and other taxing authorities, and each city then sends back its proposed tax rate to the property appraiser.
Aug. 24 marks the final day for notices to be mailed to property owners. And by about mid-September, property owners will face a deadline to file any appeal. Then on Nov. 1, the tax or revenue collector will mail out tax bills to property owners.
Why are people buying pricier homes?
Homebuyers have moved fast to buy residences in the past year, benefiting from historically low interest rates for mortgages.
As interest rates went down, it allowed people taking out a mortgage to buy a more expensive house. Craig Kirsner, a Coconut Creek-based retirement planner, said the government has been keeping interest rates artificially low since 2009, and home prices have continued to climb. Homebuyers have seen prices increase 10% or more across South Florida during the first year of the COVID-19 pandemic.
“There’s a direct correlation between low interest rates and high real estate prices,” he said. “It means everybody can buy a more expensive house.”
But an expected influx of foreclosures could eventually change the landscape. Once interest rates go up, demand will become lower and people will need to pay a higher mortgage for the same priced house, said Lauren Einhorn, a Fort Lauderdale real estate attorney. “People will either be stuck in their houses or get out and take a loss,” she said.
In February, the Biden administration said just over 10 million homeowners are behind on mortgage payments. To provide pandemic-related relief he extended the foreclosure moratorium for homeowners through June 30, among other efforts.
“These critical protections were due to expire in March, leaving many at risk of falling further into debt and losing their homes,” the White House said in a statement.