September 17, 2020

The Pandemic Hasn’t Stopped Property Values from Rising

In S. Fla., for example, records show home values rose from 2019, meaning it could bring higher tax bills as the region deals with financial worries from COVID-19.

FORT LAUDERDALE, Fla. – South Floridians, be prepared to pay more in property taxes this year.

Property appraiser records show home values rose from the year before, meaning it could bring higher tax bills as the region wrangles with financial worries from the COVID-19 pandemic. The rise in values comes as new construction keeps thriving, with many new condos and apartments being built.

Palm Beach County’s property values increased by an average of 5.9%, thanks in part to new construction. There has been a building boom in West Delray and West Boynton. Additionally, The Bristol, a new West Palm Beach condominium, added roughly $300 million in new construction to the tax rolls, Palm Beach County Property Appraiser Dorothy Jacks said.

New buildings also have helped Broward County’s values rise by an average of 6.1%. The top three valued projects came from Fort Lauderdale. The city of West Park had the biggest jump at 10.2%.

Many businesses faced shutdowns during the pandemic, but construction still managed to carry on. As a result, COVID-19’s true impact may not be felt by the construction industry for some time, and South Florida’s property values could keep rising despite the coronavirus crisis.

“If the larger economy slows down, if we see any slowdown to our construction, it won’t be this year or next year, it’ll be a couple years as the investment that starts the construction process slows down,” Jacks said.

Rising values

In the coming weeks, cities will be signing off on their budgets, calculating how much money they’ll collect from homeowners and commercial property owners so they can pay for everything from police services to park maintenance to street repairs.

Many South Florida cities have favored keeping their property tax rates the same while the values have risen.

In Boca Raton, the city’s operating tax rate remains even at 3.68%. However, with average assessed values for single-family homeowners rising from $519,000 to $542,000, taxpayers will pay slightly more this year.

The city also is adding an additional $1.99 in sanitation fees for single-family residences. Like many cities, Boca Raton is forced to make budget cuts due to COVID-19. Among other things, Boca will decrease expenses for travel, recreational/cultural programs and vehicles, a city official said.

While Delray Beach’s operating tax rate decreased slightly from 6.86% to 6.85%, the city’s average assessed value for single-family homes increased by nearly 5 percent, meaning taxpayers also may pay more this year. Delray also is facing financial shortfalls due to COVID-19, leading to proposed cuts in public works and neighborhood and community services, among other things.

Boynton Beach’s tax rate is staying the same at 7.9% while average assessed values for single-family homes increased from $159,000 to $167,000. City Manager Lori LaVerriere said Boynton Beach is down about $1.2 million from state-shared revenue and sales tax revenue. The city plans on dipping into its designated fund balance to help fill the hole, allowing them to avoid any service cuts.

“We fared well considering some of our other neighbors are getting hit with $10 million reductions in losses and looking at laying people off,” LaVerriere said. “We’re not in that position, fortunately.”

The majority of Broward’s 31 cities also have opted to keep their tax rates the same. Three of them – Oakland Park, Southwest Ranches and Wilton Manors – are proposing slightly lower tax rates.

How much the new coronavirus will continue to strain finances remains unknown, especially if property owners, including landlords, can’t pay their bills. “The economic fallout from this pandemic will unfold over the next several months – and even years,” Oakland Park City Manager David Hebert warned.

Oakland Park has started seeking ways to save: All city staff’s hours have been reduced by 10%, excluding firefighters as well as some other exceptions. There also will be some hiring and overtime freezes, a reassignment of staff, as well as the city’s asking vendors to reduce their rates.

Park programs in Tamarac will take a 40% financial hit because of the pandemic, the city manager warned there. People are driving less during the pandemic, so that’ll mean less money for the city from its portion of a regional gas tax. To save money, the city instituted a travel ban and postponed replacing any cars, with the exception of fire department vehicles.

Facing fees

Tax rates are just one piece of the overall bill faced by South Florida homeowners. Everyone with property must pay school district taxes, fees to the hospital districts and water management districts, and the Children’s Services Councils. In Broward, the children’s council will add 48 cents of every $1,000 of taxable value to the bill.

Cities also may levy fees for fire service, which ranges from $129 in Lauderdale-by-the-Sea to $629 in Southwest Ranches. Weston will raise its fire fees from $472 to $549.

A handful of cities have tacked on garbage and stormwater fees to the property tax bills, too.

In addition to the operational tax rate, the majority of Broward’s cities add to the bill any ongoing voter-approved debt to pay for projects. The amount of debt gets added to the city’s operating tax rate to compute a homeowner’s final city tax bill.

That ranges from the lower end of 22 cents for every $1,000 of taxable value in Fort Lauderdale, which is used for the construction of new police headquarters and new fire stations and improvements to parks and recreation facilities. The length of the debt service varies depending on when the bonds were issued and the last one in Fort Lauderdale will end in 2049.

The highest debt among Broward’s cities is in Lauderhill, which collects $1.80 for every $1,000 of taxable value to pay for improvements to parks and roads.

In Wilton Manors, the debt that is added to the tax bills is almost 28 cents for every $1,000 of taxable value. It comes from a 2006 bond to construct the City Hall and police station, and will be paid off in 2028.

There will be some relief with some discounts available.

Cuts to the total bill can be applied for homestead exemptions, disability, widow and senior exemptions, among others. Those who pay quickly also get a discount as high as 4%. Taxes must be paid by March 31.

To look up how much you’ll face paying, visit bcpa.net for the Broward County appraiser’s website, or pbcgov.org/papa for the Palm Beach County appraiser’s website.

Information provided by Florida Realtors. Click here to see the original article.