Florida, with its beautiful weather and sandy beaches, attracts not only tourists but also residents seeking a permanent paradise. Paradise comes with a price tag, though, and a significant portion of that tag is property taxes. As a Florida real estate attorney, I get many questions from clients about property taxes, especially deadlines, discounts, and the dreaded tax deed sale. Since I answer these questions so often, I decided to write the answer here, so I can send a link instead of retyping it. Sort of like a time-traveling copy/paste gift to all of us.
Understanding Your Tax Bill
Florida property taxes are assessed annually based on the property’s just value on January 1st of that year. The county property appraiser determines this value, and you’ll receive a Notice of Proposed Property Taxes in August. After local governments set their budgets, the county tax collector prepares the final bill.
Florida property taxes run on the calendar year and are paid in arrears, which means you pay for the year after you have lived it. The final bill goes out in November, and it covers a calendar year that is almost over by the time the bill lands. The August notice only proposes taxes. Nothing is payable until the tax bill is issued, and taxes are payable (but not necessarily due) as soon as the bill arrives.
Also on the tax bill is a separate line item for non-ad valorem assessments. Although paid along with the ad valorem taxes which are billed on the calendar year, the non-ad valorem assessments’ billing periods vary. This means that the tax bill often has at least two amounts paid together but not covering the same stretch of time. Confusing? Yes.
Discounts and Deadlines: Paying early comes with benefits. Florida offers a discount for early payment:
- 4% if paid during the month of November
- 3% if paid during December
- 2% if paid during January
- 1% if paid during February
There is no discount for paying in March, and the deadline is March 31st. In other words, taxes for one calendar year are due by March 31 of the next. If the bill goes out late, the 4% rate also applies for 30 days after the original notice is sent.
Delinquency and Tax Certificates: If your property tax remains unpaid after March 31st, it becomes delinquent, and interest accrues at 18% per year from the delinquency date. If your taxes still remain unpaid as of June 1, the county sells a tax certificate on your property. The certificate covers the delinquent taxes, interest, costs, and charges, and it is paid off when you redeem it.
Buying or Selling? Prorations Happen All Year
Property taxes are prorated at every Florida closing, in any month of the year. Because taxes are paid in arrears, a sale splits the year’s bill between the seller and the buyer based on the days each side owned the home, whether the bill has arrived or is still months away. Between November and March, the early-payment discount adds another moving part. As the closing agent, my office works out each side’s share on every closing, so you never have to do the math yourself. If another office is handling your closing and you want to check its work, proration.net is a free Florida proration calculator, built and provided by my office for all of humanity, free of charge, and it works for a closing in any month of the year, and even lets you calculate based on the early-payment discount.
Tax Deed Sales: Act Fast to Avoid Losing Your Property!
If a tax certificate goes unredeemed, the certificate holder can apply for a tax deed once two years have passed since April 1 of the year the certificate was issued. The clerk of court then advertises and runs a public auction of the property itself.
Homeowners with Mortgages: Escrow to the Rescue (Usually)
Thankfully, for most homeowners with a mortgage, there’s a safety net. If your mortgage includes an escrow component, it likely (but not always) includes the collection for and payment of your real property taxes. In fact, Florida Statute § 501.137(1) requires a lender that is escrowing for your property taxes to “promptly pay the taxes” when they become due and adequate escrow funds are deposited, “so that the maximum tax discount available may be obtained with regard to the taxable property.” Yay for regulation!
Trust, Then Check It
Escrow should ensure your property taxes are paid on time, but it’s still wise to review your mortgage statements and tax bills to confirm everything is in order. If you pay your own bill, remember that the discount shrinks by a point each month after November. And if a bill goes unpaid or a tax certificate shows up on your property, talk to a Florida real estate attorney quickly, well before a tax deed application is possible.
