Unfortunately, the fair distribution of new stores is sometimes not as fair. Local appraisers are legally required to assess heritage from January 1 of each year. Before construction, the previous year`s tax bill represents only the value of the empty land. The tax bill for the year of the financial statements is based on the value of the property from January 1, if the property may remain empty, or may have included the new construction or partially completed structure. Unless the financial statements take place in December, the parties will not have a tax bill based on the completed structure and the tax imputation will be distorted and unfair if it is based on the calculation of the previous year`s blank property tax. After the contract, the buyer requires a reissue. The difference between what the credit was actually at closing and what would have been given to the actual taxes will go to the buyer. The balance at the close is expected to be equal (US$15,521.04/12) – 4 – $5,173.68. The amount due to the buyer as a result of the new job is $5,173.68 – $467.07 – $4,706.61 USD. In Florida, real estate taxes are paid late. This means that you pay your property taxes at the end of the year for the previous year. In the case of a real estate transaction concluded before the payment of the year`s property tax, the seller grants the buyer a credit for the period during which the seller owned the property. Taxation is generally an estimate based on the previous year`s taxes for this specified property.
Suppose property taxes on real estate A amounted to $1,000 in 2019. The buyer and seller close with the sale and purchase of Property A on May 1, 2020. In conclusion, the seller will grant a credit to the buyer for the period during which the seller owned property A (4 months). As a result, the balance owed by the seller to the buyer for the closing of Property A is equal (US$1,000/US$12) – $4 -333.33 USD. The buyer will then be responsible for paying the total property tax bill when it matures at the end of 2020, in this example, that amount would be $1,000. In Florida, it is important to note that tax amounts will be released in November of the year before they are officially due. If you pay your taxes until November 30 of each year, you get a discount on your taxes for the year (there is also a smaller reduction if you pay your taxes in December). The problem caused by the Save Our Homes Cap and the annual maximum increase is that sellers of real estate who have owned their property for a long time have an assessed taxable value that is significantly less than the market value of the property. In the case of the sale, which is probably close to the market value, the auditor will re-evaluate the property at 80% – 90% of the sale price.
The result is the pro-rata tax credit granted at the close, which is drastically less than the total tax bill that the buyer must pay at the end of the year. The joint committee of the Florida Bar and the Florida Association of Realtors (“FAR-BAR”) developed the concept of “tax provation” as a solution to this dilemma. The “tax extension” clause is recalled in FAR-BAR`s AS IS housing contract in paragraph 18 (K) and states that “the taxation on the basis of a forecast statement is tailored to the request of one of the parties after receiving the current year`s tax bill. This STANDARD K will survive the closure. This provision allows each party to a real estate transaction to apply for new annual taxes.