Real Estate Taxes
Most people around the world pay taxes on the transfer of real property. Florida is no exception. In fact, property transfer taxes provide a significant portion of Florida state and local revenues. Residential rentals of six months duration or less must also pay sales and other local taxes, which are often passed along to the tenant.
As in any other state, Federal income taxes and capital gains taxes may apply to any real estate transaction. Check with your accountant to determine what impact these taxes may have. There is also an annual property tax on any property you own.
Florida Transfer Tax
Most sales contracts provide that the seller will be responsible for the taxes associated with transfer of the property to the buyer. These taxes, known as the “documentary stamp tax” are calculated at 70% of each hundred dollars of the selling price. For example, a sale of $250,000 will result in a documentary stamp tax of $1,750.
Financing a purchase or refinancing a property already owned carres a documentary stamp tax of 35% of heach hundred dollars financed, plus a 0.2% intangible tax. Thus, a $250,000 mortgage would carry an $875 documentary stamp tax and an intangible tax of $500.
Florida Property Tax
All Floridians pay an annual Florida property tax to the local municipality on the assessed taxable value. There are a litany of authorized exemptions that may reduce the property tax, depending on the owner’s qualification. Churches, schools and government properties are exempt.
All Floridian property owners pay property taxes that 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. The current tax rate is applied to the assessed value of each property to determine the actual tax.
Property tax rates are the same for all properties in a given municipality, regardless of who owns it or regardless what exemptions they hold. Full time residents, Veterans and widows/widowers are among the eligible owners who may be entitled to apply for an exemption that will result in a reduction in their property taxes. The most significant exemption is for permanent residents, known as the homestead exemption. A homeowner holding a homestead exemption is entitled to have the assessed value of their property limited to an annual increase of 3%.
Florida property taxes are due March 1st, but property owners can begin paying on November 1st of the tax year. Taxes paid in November are entitled to a 4% discount..The discount is reduced to 3% in December, 2% in January and 1% in February. The full amount is due by the end of March. The taxes paid represent taxes accruing from the prior January 1st. For example, payment of 2020 taxes will be due beginning November 1, 2020, but the tax lien for 2020 attaches to the property on January 1, 2020.
Richard S. Weinstein
A real estate attorney can help you understand real estate taxes. Richard S. Weinstein is an experienced real estate attorney and title agent who can help you with all of your real estate transactions. Having legal representation makes good real estate business sense. A competent and experienced attorney will protect your interests.
With over 50 yeas of experience as an attorney, Richard S. Weinstein assists clients with the important financial situations in their lives. Whether you are dealing with bankruptcy, real estate (both commercial and residential, including short sales, foreclosures, and title insurance), estate planning, probate, business formations, or sales or mergers, Richard S. Weinstein is the attorney with the education, experience, and knowledge you need! Call us at (561) 745-3040 or visit his website at rweinsteinlaw.com.
Law Office of Richard S. Weinstein, P.A.
250 S. Central Blvd. #101
Jupiter, FL 33458
Phone (561) 745-3040
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