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  1. #1
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    Default Why property taxes are lower than other units in the same building and line

    Last night I had dinner with a client that just relocated to Miami from New Jersey.

    He recently purchased a unit in the 12 line at the Blue Condo located at 601 NE 36th Street for 50% less than the original asking price.

    During our meal, he asked me a question about his property taxes, and questioned how his new unit appeared on the Dade County property appraiser's page.

    My client told me how he used this government website daily to research units while shopping for his home in New Jersey. He could not understand why his unit on the tax roll did not show the information about total square feet, the number of bedrooms, and why his tax amount that was due was substantially lower than units in the same line located 10 floors below him.

    He said for some reason all of the missing information was there for units on floors 2 thru 26 in the same line form but all units above the 26th floor where blank and shared the same “less expensive” tax assessment.

    Here's the answer I gave him...

    Blue Condo has been in pre-sales and under construction for the last 40 months. Blue was only technically an empty piece of land in the eyes of the Dade County property appraiser during this period. The assessment is only changed when the building is completed and units individually receive a Certificate of Occupancy from the building department. This happens to be very beneficial to the developer because they only pay taxes on the very low assessed vacant land value during the construction period and possibly for any unsold units that have to carry until sold.

    It was obvious to me that my client was being able to share in this savings because his unit was not given a Certificate of Occupancy in this tax period and this is also why his unit does not have any data showing up in the tax roll. For this reason he has a much lower assessment than his neighbors in the same line on floors 25 and below. But he asked me again. “Why does this only effect from the 26th floor and above?”

    I answered by explaining to him that typically the building gets completed from the ground up and that all of the units aren't inspected and granted the Certificate of Occupancy at the same time.

    It takes a long period of time for this process and its starts on the lower floors. In this case they must have only completed floors 2 thru 26 prior to the tax year cut off. I told my client, the good news is he will save and pay less tax this year compared to his neighbors, but the bad news was that his unit will be assessed at a higher value than his already assessed neighbors' base on higher construction costs (partial method used) that will calculated for next years taxes.

  2. #2
    Jim
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    Lyle thanks for the insightful information.

    The tax and insurance costs in Florida are overwhelming the potential buyers.

    When Mr. Borrower was scrambling to meet his deposit deadline at 1800 Club, the biggest hurdle became "insurance". He couldn't do anything until his insurance company was notified and agreed.

    From what the insurance agent told me, is that "Citizens Insurance" is controlled by Florida State Government. Each time a change was made to Mr Borrowers policy, the State of Florida had to approve.

    This was new to me. I am not sure at this moment if that's true, but it was a bureaucratic obstacle that consumed a full day.

    Does anyone know of an insurance agent left in Florida that provides "service".

    The particular office which we were dealing with wouldn't answer their telephone, would put you on immediate hold, not return calls, and in general completely disregarded their clients welfare.

    If there are persons who have ideas on how to bring insurance companies back to Florida, I think that's a topic which also needs addressing.

  3. #3
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    I hear that Blue has phenomenal views. Lyle, do you know if the traffic noise is a factor there? I am working with some buyers and am conidering showing them a unit there.

  4. #4
    Gus
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    Jim, you're right, taxes and insurance are overwhelming to potential buyers. Michelle and I considered buying a 3 bedroom tear-down house in Morningside for $500,000. The deal was doable until we factored in the property taxes which added an extra $12,500 a year. The additional expense killed it for us. We never even got to the home insurance stage.

    I see you started a new topic about rising homeowner insurance rates. I'm excited to explore this concern, but let's continue the home insurance discussion here.

    Albert, anyone can tell you the views at Blue are great. Obviously, the higher the floor the better the view. I was in a mid floor apartment at Blue, and didn't hear any traffic.

    I'm sure many people here would like to discuss Blue's amenities, but please start a new topic. This way we can really explore the building's pros and cons.

    Lyle, it was interesting to learn:

    "Blue Condo has been in pre-sales and under construction for the last 40 months. Blue was only technically an empty piece of land in the eyes of the Dade County property appraiser during this period. The assessment is only changed when the building is completed and units individually receive a Certificate of Occupancy from the building department. This happens to be very beneficial to the developer because they only pay taxes on the very low assessed vacant land value during the construction period and possibly for any unsold units that have to carry until sold."
    and that:

    "typically the building gets completed from the ground up and that all of the units aren't inspected and granted the Certificate of Occupancy at the same time."
    You say:

    "I told my client, the good news is he will save and pay less tax this year compared to his neighbors, but the bad news was that his unit will be assessed at a higher value than his already assessed neighbors' base on higher construction costs (partial method used) that will calculated for next years taxes."
    So the moral of your story is..?

  5. #5
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    ---
    The following message was cut out to a new topic by Gus. New topic at: forums/viewthread/203/ 12:15am on Nov. 6, 2006
    ---

  6. #6
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    Gus, the moral of my story is, buyers are better off figuring out how to pay today's lower assessed tax rates rather than next years.

    The advice I gave to my client is, he should call the Tax Department and tell them they should come and measure and count rooms today and get it on the books for this year.

  7. #7
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    ???

  8. #8
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    Let me explain...

    The unit slipped through not getting assessed this year because it did not have a certificate of occupancy on January 2, 06.

    The new owner can call the tax department and tell them that he purchased the unit and it currently has the certificate of occupancy and he want's to pay the true taxes based on 06 valuations for new construction.

    If he waits until next year he will be charged based on purchase price only for sure. There is a possibility that his assessment would be based on construction and maintain a 3% increase (homestead) and not have it based on purchase price. There are other advantages to start paying the real taxes as of this year.

    Regardless a property owner should always consult an attorney to be properly advised on any decision he makes

  9. #9
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    Gus your comment

    "I was in a mid floor apartment at Blue, and didn't hear any traffic."

    They must of had a road block or somthing the day you where in the building. :lol:
    This building has lot's of noise from the Julia Tuttle Cauesway. One owner told me that after a week of living in the building it goes away. You don't hear it becuse you get use to it.

    The bottom line is that there are some very good purchases to be made in the building from some very motivated sellers.

    Blue also has some some of the best Rental deals . My office has been helping a lot of people with Rentals in this building

    But always remeber... You get what you pay for.

  10. #10
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    Thanks guys, very helpful.

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