Walt Disney World saves millions in tax savings because it has cattle grazing on its grassy acreage. And did you know that SeaWorld and Universal theme parks in Orlando are now in the pine tree growing business? What? Thanks to one of Florida’s most outdated laws affectionately called Florida’s Rent-a-cow law, this 1959 law is allowing developers to take advantage of rules initially created to help farmers not be seduced by the price their land could bring if they sold during the ‘building boom.’ But Florida’s Greenbelt tax break is no longer just for farms. In fact, developers are the largest recipients of these breaks, encouraged to “buy large tracts for cheap knowing they can pay rock-bottom property tax indefinitely through token efforts at farming or ranching.”
If you try to save money like this, I have to warn you… if you rent or purchase cows, they’re staying for a looong time. And not just for supper! As they say, with tax breaks comes smelly yards. If you decide to sell the land or change its purpose, it’s your responsibility as the owner to notify the tax assessors of the change, or else you may pay penalties for your property with back assessment. One nice thing is that once you achieve Greenbelt status, your home or property will be grandfathered in the following year. However as another warning, your property will be assessed at least once every 5 years after the initial inspection.
For those of you who don’t feel like becoming Farmer Bob overnight, here are 3 realistic ways your property tax can be lowered.
Request Your Property Tax Card – And Study It!
Properties are appraised annually, and you only have a limited time to appeal an increase in your real estate taxes. Few owners realize they can go in person or, depending on the district, online, to request a copy of the assessment of your property. These typically include the size of your lot and information regarding the number of spaces constructed within your building. So if you realize a mistake has been made and it costs you money, let them know or you may miss your deadline, costing you thousands.
Each year you can request to have payments lowered or payment plan extended to make property tax more affordable – on YOUR timeline. I know here in Florida we have ‘seasons’ where the shopping is like the weather – heavenly. But then during off-season, people shop less or simply leave the sate. That messes with revenue which hurts if you’re stuck with a hefty tax assessment. HOWEVER listen up: if you choose to extend, you’re not getting the extra breathing room for free. It’s a loan sometimes with high rates. My suggestion to everyone is to pay your taxes as early as you can. In most states, this saves your 4% off the total due. In fact, we once had a very busy property owner who, unbeknownst to them, missed that discount every year for 5 years and lost out on over $50,000 in savings!
By claiming homestead on your primary residence, your Property Appraiser will reduce property tax for all homeowners by sheltering a certain amount of a home’s value from tax. For example, this may mean that a $2 million home is now assessed at 10% less its assessment, or $200,000. A less valuable home – whether it was assessed low because of homestead or because it does not have curb appeal – will mean you pay less in taxes. OH, and the presence of a home doesn’t mean you can’t have adjacent land being classified for agricultural purposes (shout out to the ‘rent a cow program’ from earlier).
Whether you’re a first time home owner or a veteran developer, saving the most money on your property tax means more money in your pocket, for longer. If changing into Farmer Bob overnight has your name written all over it, then carefully proceed. But if you’re more like me, then the best advice is to always pay your property tax in November for the highest discount!