Differences Between Property Tax Assessment & Market Value in Florida

Assessed value equals market value minus exemptions.
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In its infographic about how taxable property values are derived in Florida, the Property Tax Oversight division of the Florida Department of Revenue shows how the market value of a property is a starting point for calculations. Market value refers to the price you would be able to sell the property for in an undistressed market. Based on the market value, assessment differentials -- such as agricultural land classifications or conservation lands -- are subtracted to obtain the assessed value. After exemptions for homesteads and government land are further subtracted from the assessed value, you end up with the final taxable value.

Property Taxation in Florida

According to the Florida Department of Revenue, property taxes are assessed as stipulated by the Florida Constitution. Every year on January 1, property assessors determine the market value of every parcel of property in the state. They do not determine property tax rates, however. Local governments in the state, including cities, counties and school districts, determine millage rates, or tax rates, for properties in their jurisdictions for the upcoming fiscal year. In August of a year, the property appraiser sends the property owner his January 1 determination plus estimated property taxes based on the established millage rates.

Yearly Assessment

According to the Florida Department of Revenue, every January 1 a property is assessed at what it calls "just value," or market value. When you first obtain a property, the just and assessed values are presumably the same. If the just value of the property goes up, the assessed value may do so only up to a maximum of 3 percent for a homestead property and 10 percent for a non-homestead property. If the just value decreases, the assessed value of the property can increase every year until it matches the just value. However, assessed value can never be greater than market value.

Rules of Thumb

While tax rates vary in Florida from county to county, and from one local jurisdiction to another, realtor Rick Rapp notes on his website that there is a basic way of estimating a property's tax-assessed value vs. its market value. Usually, the former is going to be 80 percent of the latter, less any exemptions applied to the property. Among those given exemptions are widows and widowers, senior citizens, veterans and the combat-injured, and the partially-paralyzed and blind. For short sales and foreclosures, the tax-assessed value could be 200 percent of the market value. If you disagree with the assessment, you can apply for an appeal.

An Example

In an actual example from a Broward County property assessment, Rick Rapp shows the difference between the fair market value of a home and its tax assessed value. The assessor takes the fair market value of the home -- in this case, $250,000 -- and multiplies it by a factor of between 80 percent and 90 percent. This works out to a tax assessed value of $212,000 for the midway point, without any exemptions. With a homestead exemption, however, the TAV would be $162,500.

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