Real Estate for Foreign Investors
- Selecting the right property or investment
- Real Estate Properties
- Mortgage & Financing for Foreigners
- Before you sign the offer
- Calculating real estate taxes in Florida.
Calculating Real Estate Taxes in Florida for non-U.S. residents
The State of Florida has no state income tax, however, they make up for it with real estate taxes. The real estate taxes are paid annually between November and March, and taxes can vary widely depending the city and county where the property is located.
Every time a home changes ownership, it is reassessed at its full value once again by the Property Appraiser’s office. Fortunately, most of the time, you won’t pay taxes on the entire price of your home, since property appraisers have a duty to assess your home at “just value” (not market value). Accordingly, the typical property valuation is between about 85-95% of what the estimated selling value of the property. For a newly purchased home exclude the appraisal excludes closing costs, transfer taxes, and real estate commissions that may have been built into the final sales price because they are not really part of the “value” of the home.
The Property Appraiser’s Office gives assesses the value, but it is the local government that yearly determines the tax amount to be paid, according to the proposed budget of the taxing district (city, county, school district, etc.). To do so, the local government sets what is called “the millage rate” expressed as “mils per thousand”. For example if the millage rate is “22.55”, then you will pay $22.55 per $1,000 of assessed value.
When investing in real estate, be aware that taxes will higher in areas that are experiencing rapid population and housing growth. For example taxes in 2011 on a $250,000 home in Dade County (Miami area) could be $5,188.29, and taxes on the same priced home in Sarasota County could be $3,412.59. Finally, real estate taxes in Florida are paid in arrears, and you will have an opportunity to get a small discount for paying them in early. Make sure to take two to three days to have your attorney review the contract prior to signing it.