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Real Estate Course (FL) - Sales Associate - Week 5 > Chapter 18 - Taxes Affecting Real Estate (3%) > Flashcards

Chapter 18 - Taxes Affecting Real Estate (3%) Flashcards

1
Q

Section 18.1: REAL PROPERTY TAXATION

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

A 
 Local Tax Districts impose property
taxes
     Cities
     Counties
     School Boards
     Special Tax Districts
 State and Federal governments do
not levy property taxes
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2
Q

Section 18.1: REAL PROPERTY TAXATION

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

Tax Rate Expressed in Mills

A

 Mills
 1/1,000 of a dollar
 convert to a Decimal Number by moving the
decimal 3 places to the left. e.g. ten mills (10)

The 10 Mill Cap
 City
 County
 School board tax rates

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3
Q

Section 18.1: REAL PROPERTY TAXATION

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Property Tax Assessments

A
    • Ad valorem
        • According to value
    • Assessed value - county appraiser
        • Based on “just” or “fair” value
    • Taxable value
        • Assessed value - exemptions
    • Tax levy
        • Taxes payable
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4
Q

Section 18.1: REAL PROPERTY TAXATION

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Protesting the Tax Assessment

A

** Three (3) step process:

** 1) Request informal conference with
county appraiser

2) 25 days after receipt of the TRIM notice
Value Adjustment Board
     Two county commissioners
     One school board member
     Two private citizens

3) Appeal with district Court of Appeals
 60 days after Value Adjustment Board

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5
Q

Section 18.2: REAL ESTATE TAX EXEMPTIONS AND LIMITATIONS

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Exempt Property and Immune Property

A
    • Exempt property
        • Church
        • Non-profit organizations
    • Immune Property
        • Government owned
        • Not assessed
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6
Q

Section 18.2: REAL ESTATE TAX EXEMPTIONS AND LIMITATIONS

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

Greenbelt Laws

A 
 Protects owners of agricultural land
from excessive taxation
     Encroaching uses raises value
     Land might be suitable for development
     Abused by developers
 Assessment is based on actual use
rather than Value in use
     Highest and Best Use is not a factor
 Owner must justify the use each year
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7
Q

Section 18.2: REAL ESTATE TAX EXEMPTIONS AND LIMITATIONS

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Homestead Tax Exemptions

A
    • First time applicants
        • Resident of Florida before Jan 1
        • Apply at the property appraiser’s office
        • Apply between January 1st and March 1st
        • Primary residence
        • Renew every year
    • Exemption (SEE CHART ON PAGE 349)
      • *based on Assessed value
      • *Up to $50,000

** Additional Property Tax Exemptions
** Homestead
** Widow/widower(not remarried) - $500
** Legally blind - $500
** Totally disabled non-veteran
** 100% exemption
** 10% or greater disabled veteran
(service related)
** $5,000

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8
Q

Section 18.2: REAL ESTATE TAX EXEMPTIONS AND LIMITATIONS

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Save Our Homes Assessment Limitation

A

** Amendment to the Florida Constitution
** Limits increases to the Assessed Value of
homestead property to lesser of
** 3% per year or
** Percentage change in the Consumer
Price Index (CPI)
** Property assessed again January 1
following a change in Ownership
** Non Homestead Property
** Annual cap 10% annually

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9
Q

Section 18.3: CALCULATING A REAL ESTATE TAX LEVY

:::STATE EXAM CONTENT AREA: XVIII.A.1: CITY AND COUNTY PROPERTY TAXES - MATH - TAXES:::

** Applying the Tax Rate and Exemptions

A

** Calculating Property Taxes (SEE PAGES 349, 351-352)
$50,000 or Less

** Calculating Property Taxes (SEE PAGES 349. 351-352)
From $50,001 to $75,000

** Calculating Property Taxes (SEE PAGES 349. 351-352)
From $75,001 and Up

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10
Q

Section 18.3: CALCULATING A REAL ESTATE TAX LEVY

:::STATE EXAM CONTENT AREA: XVIII.A.1: CITY AND COUNTY PROPERTY TAXES - MATH - TAXES:::

** Special Assessment

A 
 A one-time tax (not an ad Valorem
tax)
** Pays for an Improvement
    ** E.g. sidewalk, widening street, paved
    roadway or streetlights
** Must enhance value of property
 Usually levied on a Front-foot Basis
     Neighbors across road pay half
     Not ad valorem
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11
Q

Section 18.4: PAYING THE TAX LEVY

:::STATE EXAM CONTENT AREA: XVIII.A: CITY AND COUNTY PROPERTY TAXES:::

** Real Estate Property Taxes

A 
 Taxes on a calendar year basis
     January 1st – become a lien
 True Rate in Millage (trim)
     Mailed in August
 Tax bill received in November
     November – 4% discount
     December – 3% discount
     January – 2% discount
     February - 1% discount
     March - Face value
    ** April - Delinquent
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12
Q

Section 18.5: THE EFFECT OF FEDERAL INCOME TAXES ON HOMEOWNERSHIP

:::STATE EXAM CONTENT AREA: XVIII.B: FEDERAL INCOME TAXES:::

** Tax Benefits of Homeownership

A
    • Real Estate Property Tax Deduction
        • Deduct as expense from federal income taxes

** Mortgage Interest Deduction
** Deduct mortgage interest on up to $1,000,000
debt
** Principal or secondary residence
** Buy, build or improve

** Home Equity Interest Deduction
** Deduct interest on up to $100,000 debt on home
equity
** Principal or secondary residence

 Sale of Principal Residence
 Taxpayer Relief Act of 1997
 Principal residence for 2 of last 5 years
 Married filing joint return
 Exempt $500,000 gain on sale
 Single homeowner or married filing separately
 Exempt $250,000 gain on sale
 What qualifies:
 Recreational vehicle or boat as principal
residence
 Kitchen, sleeping and bath facilities

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13
Q

Section 18.6: REAL PROPERTY INSURANCE

*** Multiple Insurance Policies

A 
*** Proportional shares
     3 insurance policies on same property
    1) $50,000
    2) $75,000
    3) $60,000
        $185,000 total coverage
Loss for $40,000 is sustained, each policy would pay a
“pro rata” share
50,000 ÷ 185,000 x 40,000 = 10,811
75,000 ÷ 185,000 x 40,000 = 16,216
60,000 ÷ 185,000 x 40,000 = 12,973
                                                   40,000
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Real Estate Course (FL) - Sales Associate - Week 5 (2 decks)

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