Understanding your property tax bill
NEWS WRITER
Let’s begin by getting a couple strange sounding terms defined. The term ad valorem is Latin for “according to value”. In the case of municipal property taxes, property owners have their property assessed on a periodic basis by a public tax assessor. The assessed value of the property is then used to compute an annual tax, which is levied on the owner by the municipality for a specified purpose. Ad valorem taxes are incurred through ownership of an asset, in contrast to transactional taxes, such as sales taxes, which are incurred only at the time of transaction.
The millage rate in local government language is synonymous with the property tax rate. “Millage” is based on a Latin word that means “thousandth.” So 1 mill is equivalent to 1/1000th.
Applied to taxes, that means 1 mill is equivalent to $1 in taxes per $1,000 in taxable value. The standard way to figure your actual tax bill based on the millage rate is to take that rate, multiply it by the taxable value of your property, then divide the result by 1,000. If your property has a taxable value of $100,000, and you are assessed a 1 mill tax rate, you’ll pay $100 in taxes.
Another bit of potential confusion on your tax bill is the homestead exemption. The homestead is $25,000 when it is applied to the school taxes, but $50,000 when applied to the other municipal taxes on the bill. Many years ago the homestead exemption was only $5,000. As the prices of homes went up, the state raised the exemption to $25,000 and as home prices continued to rise, the state raised the exemption to $50,000. At the higher homestead exemption, school districts would stand to lose considerable funding. So they petitioned the state to have the exemption for school district purposes to remain at $25,000 and that petition was granted. Thus, two different homestead exemptions may appear on your bill.
It’s the local property appraiser who assigns a value to your home. Your house could be worth more or less on the real estate market, but the house will be taxed on its assessed value as determined by the appraiser. A homestead exemption may only be granted when the home is your primary residence. There is no exemption permitted on vacation and second homes nor is there any homestead exemption permitted on homes that are rented or on commercial property.
The first line of your tax bill: School State Law indicates your property value will be taxed by 1.9330 mills. This millage rate is set by state law and will raise $38,066,828. The second line of your tax bill: School Local Board indicates your property value will be taxed by 1.7480 mills. This millage is composed of .500 mills approved by county vote and .748 mills for discretionary spending and .500 mills for capital improvement. The school board determines the discretionary spending and capital improvement amounts. The school board portion of the tax will raise $35,244,145.
The state’s portion of the school district budget includes lottery money ($518,145), 10 percent of the Florida Education Finance Program, ($4,230,172) and funds to reduce class size according to state mandates ($9,234,543). These state contributions along with the $38,066,828 (local required effort by law) and $35,244,145 (school board portion) makes up the entire $87,298,563) school district budget.
The value of all the property in Monroe County has been assessed at $20,549,387,205 by the various local property appraisers.
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Thanks for this good article and useful information for all tax payers in Monroe County. I confess that before reading your article,I never knew what “millage” was. Thanks!