Clearwater Real Estate – Understanding Pinellas Property Valuations for Calculating Your Taxes
Clearwater Florida – when we are working with Clearwater Home Buyers and Beach Condo buyers two of the questions we get most often is, “Can you explain Pinellas County’s Property Tax system” and “What can I expect to pay?”
Today we’ll explain how Pinellas County’s property taxes are determined so you can feel comfortable planning for the taxes on your new home purchase.
While you may have a mortgage approval amount amount almost every home buyer we’ve worked with tells us that they also have a “monthly budget amount” they want to work with.
Property Taxes are a big part of determining how much they want to pay for a home or condo so they are comfortably with ALL the monthly costs.
We recommend Clearwater buyers understand the three main components that will effect their total cost of ownership. Understand your:
- monthly mortgage loan payment,
- the estimated home insurance costs (including flood insurance) &
- the estimated property taxes.
Below are the Pinellas County Property Tax formulas. Then you’ll see a flow chart we created giving you an overview of the process, followed by an explanation of how “the three values” are determined by the Pinellas Property Appraiser for your property (or any property):
Pinellas County Property Tax Formulas
- Property is Purchased or Appraised for the year
- Market Value/Just Value (Capped by the Save our Homes Cap) = Assessed Value;
- Assessed Value – Exemptions = Taxable Value;
- Taxable Value x Millage Rate / 1000 = Gross Property Taxes for the year
If you have additional questions after reading this don’t hesitate to email us with your questions.
Step 1 – Understanding How the Pinellas Property Appraiser Estimates Market Value (Just Value)
What is Market Value / Just Value?
Market Value (Just Value) is the price the property should sell for in the open market, under normal circumstances and in an arms length transaction. (So if you sell your home to your child for $1 – they are not going to pay property taxes on $1 even though that was the purchase price.
They will pay taxes on the price that a buyer would have paid you if you had offered your home for sale). In today’s market we also see people who buy a distressed home or condo and may find the Pinellas County Property Appraiser determines the market value to be higher than their purchase price. The Market Value should be the price two identical pieces of property would sell for. This is sometimes called the “Just Value” as well.
Pinellas County Property Appraiser uses 3 methods to calculate Market Value along with their Computer Assisted Mass Appraisals (CAMA)
3 methods used to determine Market Value
- sales comparison approach (comparable used – uses price other similar homes have sold and is most often used with residential homes) ;
- cost replacement approach;
- income approach;
Step 2 –What’s My Assessed Value? Warning NOT all properties Assessed the Same
What is Assessed Value?
In Pinellas County the appraiser will estimate the market value of your home or condo using the 3 methods above and then determines the assessed value. “Florida law provides that all property is to be assessed at 100 percent of market value less the cost of the sale”. (Source: www.pcpao.org)
This is the point at where things change depending whether your property is your primary residence and you have filed for Homestead Exemption or not.
If it’s your primary residence and you’ve filed your Homestead exemption by the deadline then your taxable amount will be limited by the 1995 Save Our Homes Cap to 3% or the Consumer Price Index – whichever is less.
This is why when you are looking to buy Clearwater homes in a neighborhood the information in the Tampa Bay MLS stating annual taxes for similar homes is irrelevant – everyones property taxes are reset when a Pinellas Property is sold and the Pinellas County Appraiser will determine a new Market Value (see Step 1).
When Does Market Value = Assessed Value?
If your home doesn’t qualify for Homestead Exemption (this would apply to people like real estate investors, vacation property owners, second home owners, seasonal residents etc.) – realize that the Market Value and the Assessed value will be the same so… If there’s no Homestead Exemption filed on Property then Market Value = Assessed Value.
Step 3 – Calculating your Taxable Value
What is my Assessed Value?
Now that you have the Market Value and Asses Value you can determine the Taxable Value.
Get Taxable value:Assessed Value – any Exemptions = Taxable Value
Ex. if you purchase a home and they determine the Assessed Value is $100,000 and you have standard Homestead Exemption of $25,000 then your Taxable Amount will be $75,000 for that year.
When Does Market Value = Taxable Value?
If your property doesn’t qualify for any exemptions then you will ALWAYS used the Market Value as your Taxable Value to calculate your yearly taxes.
What will the Proposed Constitutional Amendment do if it passes?
There is a Florida Constitutional Amendment to be voted on January 29th, 2008 – if it passes it would do 3 major things:
- double the homestead exemption to $50,000;
- allow your exemption to be portable – when you buy a new home so your taxes don’t jump up after being in greatly reduced by only being taxed at a low rate;
- there would be a 10% annual cap on Non Homestead-ed properties. This would then limit how much the Market value could adjust in any given year on Non Homestead-ed properties. This will help second home owners and Tampa Bay real estate investors who saw taxes jump dramatically as property values increased 50% over the last five years in Florida.
Read our Next Article
- Explains what the millage is and how it affects your property taxes;
- How to calculate what your property taxes will be
- Give examples and link to complete Pinellas County 2007 Millage Chart
- Give examples using this formula: Taxable Value x Millage Rate / 1000 = Gross Property Taxes for the year
Want to Search for Clearwater Homes or Condos?
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The above information and images are Copyright © 2007 Jack and Cyndee Haydon, REALTORS and your Clearwater Real Estate Consultants and may not be copied, reproduced, distributed, transmitted, displayed or published. All rights reserved. Plagiarism will be detected and is punishable by law.