Real Estate Taxes
Floridians, like most everyone around the world, pay taxes. Florida is one of a few states that does not have state income tax making the state a popular place to retire.
Florida does have a property tax on all properties you own, and if you are renting or selling that property, you may be required to pay federal taxes on any profit made. Short-term rentals have their own set of taxes which are normally shifted to the tenant in the lease agreement.
Property Tax in Florida
Property taxes fund public schools, libraries, medical services, infrastructure, and roads. The local property appraiser sets the assessed value to each property effective January 1st each year. Each Floridian must pay these property taxes according to state law. The only Florida properties exempt from paying property taxes are schools, churches, and government properties.
Regardless of who owns a property, the tax rates stay the same. There are a few ways to receive a property tax reduction. Permanent residents, veterans and widows/widowers are eligible for an exemption of a portion of their property tax if the property is their primary residence, not a second-home or rental.
Floridian property owners can receive a discount on their property taxes by paying their taxes early. Although annual property taxes are due in full in March of the following year, If paid during November of the tax year a property owner will save four percent. If paid in December they will save 3%, 2% for January, and save 1% if paid in February..
The most significant reduction comes from the homestead exemption allowed on the primary homes of permanent residents.In addition to a $50,000 reduction in assessed value, the Homestead Exemption limits to 3% the annual increase of the property’s assessed value from the prior year, regardless of how much the actual value of the property appreciates.
Capital Gains Tax
The United States Government taxes the profits property owners earn from the sale of their properties. This tax is called Capital Gains tax. The capital gains tax is calculated on the profit made from the real estate sale minus expenses and the applicable capital gains tax will depend on who holds the title. It is important to keep accurate records documenting allwei expenses. Consult with your accountant to see how a real estate sale will impact you. If you are exchanging properties, your accountant can also advise you of the benefits of a 1031 Exchange.
It is essential to work with your real estate attorney and title company if you are contemplating selling your property. Florida National can work with your attorney to help you determine if a 1031 exchange is beneficial.
Florida National Title Services
A title company can help you understand Florida’s real estate taxes. . Florida National Title Services works under the supervision of attorneys Michele Lewis and Richard S. Weinstein, experienced real estate attorneys. They work to ensure the title of the home you desire is clear and marketable and that title insurance policies are properly issued.
Florida National Title Services provides expert title services. When you are renting, we can help with every step of the way. Florida National Title has years of experience guiding Florida homebuyers through the real estate purchase and refinance experience and have helped them solve the problems that come up in the process. We will decipher the “legalese” and explain what we need and why we need it each step of the way. The blogs to follow will address specific issues to guide buyers to understand the process better and to help them avoid many of the pitfalls. Call us at (561) 408-0729 or visit our website.
Florida National Title Services, LLC
250 S. Central Blvd., Suite 101
Jupiter, Florida 33458
© Copyright 2020. All Rights Reserved.