Property taxes are still a mess, and it’s because there is no “common” sense.
Taxpayers try to get around paying taxes, while governments try to squeeze every last nickel from taxpayers.
Why would governments want to use “highest and best use” as a valuation of property? Because sales price is just a number on a piece of paper.
You may have seen this in buying or selling a car. You gotta fill out the sales price on that title transfer, so the state can collect sales tax. Even though you bought the car for $5,000, you may have told the state you paid $50 (or a single dollar!) in order to rip off the state.
The same goes with property. You could sell a property worth $1,000,000 for a single dollar, but what kind of taxes would that bring government? Nil. So they came up with “highest and best use.” Makes sense.
But the pendulum swung too far.
The Times tells us that Juan Lopez paid $250,000 for a house in St. Pete in 2005. A new independent appraisal values the home at $237,000. However, the Pinellas County property appraiser’s office values the house at nearly $300,000. How did they come up with that number?
Lopez investigated. He was stunned to learn the county raised his 2007 property values by cherry-picking two lot sales during white-hot 2005. Most aggravating is a sale on 25th Avenue, 11 blocks away in Crescent Park Heights.
That lot sold for $200,000, but it turned out to be a speculative purchase by a builder who went bankrupt. He built a luxury home there. It’s in foreclosure. Yet this is what passes in Lopez’s case for a “comparable sale.”
This is not new information, and Pinellas isn’t the only county that has been doing it.
To relieve it a bit, the Florida Legislature passed HB 909:
Ad Valorem Taxation: Clarifies factors that property appraiser must consider in deriving just valuation; requires DOR to develop uniform policies & procedures manual for use in proceedings before value adjustment boards; requires certain persons in certain counties to attend special magistrate training under certain circumstances; revises information required to be provided on disclosure of tax impact form, etc.
All that mumbo jumbo means is that county appraisers may no longer simply go with the “highest and best use” in determining value. Of course, the “highest and best use” is still the starting point. We’ll find out next year if it helps - the law goes into effect this September.
But it’s the greed and lack of community that necessitates constant changes in the law. People (Buddy!) will find ways not to pay, and governments will still attempt to get every nickel.
It’s a tug of war that wastes a lot of time, costs a lot of money, and makes government bloated with rules (and staff).