November Can Mean Turkey Dinners As Well As Big Expenses For Florida Homeowners

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That turkey dinner usually coincides with a big property tax bill in South Florida

And no, we’re not talking about relatives eating you out of house and home!

It’s great to be home for the holidays, and for many of us in Florida, we’re getting into the busy season when friends and family stop in for a visit, and snowbirds from up north flock our way for some sunshine.

But for many of our clients, November is an expensive month, and it’s not just because of Black Friday shopping, or the cost of feeding all those relatives around the holiday table.

In South Florida, most of our clients are paying their real estate taxes this month.

When you pay your real estate taxes directly, as many clients do, you receive a 4% discount if they are paid in full by November 30. That’s a good discount, but it also means big cash outlays this month.

Clients who escrow taxes, meaning they pay a pro-rata share of the taxes and insurance each month to the mortgage company who then submits the taxes for them, can breathe easy. They’ve already taken care of their taxes through their mortgage escrow account, and nothing further is normally due to the tax collector.

Here’s a few November property tax hints:

• If you want to receive the full November 30 discount, your payment normally needs to be postmarked by the deadline (check the exact rules with your Tax Collector; some may vary). And don’t forget, your payment may be delayed due to the Thanksgiving holiday (no mail).

• Your taxes are based on your property’s appraised value less any exemptions. The appraised value could be far less than the market value of your home (what you would receive if you sold your home).

• Don’t like to pay the whole tax amount in November? Ask your tax collector about discounted quarterly payment plans. Paying by credit card may also be an option but will cost you a hefty convenience fee of about 2.5%.

•  Property taxes, at least in Florida, can vary widely from house to house, even given the same market value. “Every locality uses a unique property tax assessment method. Your actual property tax burden will depend on the details and features of each individual property,” says Tax-Rates.org. In Palm Beach County, where I live, your bill depends on when you bought your home, prices, and whether it’s considered “homestead.” Local and city taxes may also apply.

• The Sunshine State’s average effective property tax rate is 1.02%, slightly lower than the U.S. average, although some counties are higher. Palm Beach County is closer to 1.3%, which is almost double the 0.76% rate I paid years ago living in Montgomery County, Maryland. Am I complaining? Of course not. Unlike Maryland, we don’t pay state income tax here.

• Property taxes and tax rates in Florida rank 22nd highest out of 50 states. The heftiest tax rates? You’ll shell out the most in New Jersey, New Hampshire, Taxes, Nebraska, and Wisconsin.

• One pet peeve? When you’re shopping for a new home in South Florida, people (who should know better) may tell you to rely on the taxes the previous owner paid. That is likely to be far below what you’ll be paying, based on the new sales price. Do your homework before you buy so there are no unpleasant tax surprises.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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