John's Florida Real Estate Blog

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What the heck is Millage?

I was out with some customers today, and they were asking me about the property taxes on a home they were interested in. I mentioned what the millage was for the county, and they said they did not understand what that word meant. Millage is a part of the equation local governments use to determine how much property tax you are required to pay. Like millipede and millenium the first half of the word is related to "thousand". For tax purposes, the millage is what you pay for every $1,000 worth of assessed value the county property appraiser feels your home is worth.

Here is how it works. The county property appraiser puts a value on your home using specific criteria. The result is called your home's Assessed Value. It is supposedly near to the true value, but often is not. For example, I bought my home last year for $98,000 yet the assessment was set at $59,000. Not sure why, but I am not going to argue the point. Most homes I see are assessed at less than what I could sell them for. Once the assessment is set you will pay the millage (or one mil) for each $1,000 of assessed value as your yearly property taxes. Here is an example for a home with an assessed value of $210,000 in an area with a millage of $15:

$210,000 ÷ 1,000 = 210 thousands

210 X $15 millage = $3,150 Your yearly property taxes

Of course, the millage is usually an odd amount like 15.932, but the calculation is the same.

Your millage will vary depending on where you live. Here in Pasco County, if you live in the unincorporated areas of the county your taxes will be less than if you lived in cities like Zephyrhills or Dade City where you will have a higher millage since you have city services.

Now, to add to the confusion, in Florida we have several exemptions that you may qualify for if your home is your permanent HOMESTEAD property. If it is, then you can deduct $25,000 from your home's assessed value. This is called the Homestead Exemption, and your taxes are calculated using that amount. Let's use the same example as above, and imagine the home has the Homestead Exemption. The math looks like this:

$210,000 - $25,000 = $185,000 Your assessment value for calculating taxes.

$185,000 ÷ 1,000  =  185 thousands

185 X $15 = $2,775  Your property taxes if you have the Homestead Exemption.

Other exemptions for low income seniors, disabled veterans, etc exist. You can read more about these exemptions and how to apply for them at my website where I have placed links to the county property appraisers in our area. Just go to: www.jelwell.century21bnr.com and click on the County Property Appraiser button.

In addition to the exemptions, we also have something called "Save Our Homes". This was enacted in 1992 to prevent people from losing their homes due to the fact that their home's assessed value had risen so high that they could no longer afford to pay the taxes. Save Our Homes limits yearly increases of a homesteaded property's assessed value to 3% or the Consumer Price Index, whichever is less. For people who have lived in a home for many years this will make their taxes look very low. Something to keep in mind if you are thinking of buying a home from owners who have lived in it for many years. When the home is sold, the assessed value will rise immediately to the real assessed value that the county property appraiser has set for the home. As a result, the taxes the new buyers will pay may be substantially higher than those of the previous owners.

Keep in mind that property tax reforms that were implemented in June of 2007 and those that will be voted on in January 2008 may change the exemptions and the Save Our Homes rules, or eliminate them. However, the way the millage will continue to work will be the same

Hope this has helped clarify things a bit.

You can find more information about property taxes and other real estate issues at my webpage at: www.jelwell.century21bnr.com and click on the County Property Appraiser button.

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 5 commentsJohn Elwell • June 30 2007 11:45AM

Comments

great posting! i have quite a few clients that has actually asked the same question!
Posted by Deb Short (TENNNESSEE REALTY & AUCTION LLC) over 12 years ago
Great post.  We probably do seem to speak in other languages sometimes.  Great explanation too.
Posted by Kathleen West, Flagler County & Palm Coast Realtor (Trademark Realty Group of Palm Coast) over 12 years ago
In California, The basic property tax is based on Prop 13. The property tax is based on 1.124 % of the sales price with an annual adjust of up to 2% of the previous years tax. $800,000 purchase equals, or $9,920.00 the first year. The next year is $10,104. Every time it is sold, it is adjusted to the sales price. With property values having doubled or tripled in some cases over the last 5 years, we raise a lot of money. Our revenues have increased year after year and with the state sales tax of 7.75% and the state Income Tax of 11%, the beautiful state of California, raises one heck of a lot of money. We are the 6th largest economy in the world. And they spend that and a floating bonds continuously for roads, schools and just about anything you could imagine.
Posted by William Johnson, Retired Real Estate Professional (Retired) over 12 years ago
William, it would seem that you have hit the jackpot out there as far as revenue. We have no state income tax here and a property tax system that no one is interested. The legislature has just tried to reform it, But usually when they get their hands in it there is  a mess that results. Personally, after this last bout, I am betting that the sale of tar and feathers is going to go up. Between property taxes and insurance costs, the public is on a very short fuse.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) over 12 years ago
Excellent post. I just got off the phone with my brother and we were discussing millage for his area. Wished I had this refresher info before the call!
Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 12 years ago

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