5 Tax Risks in Longboat Key
Five Tax Risks That Could Derail Your Longboat Key Deal
Quick Answer
Yes, there are five significant tax risks in Longboat Key that could impact your real estate transaction. These include issues related to property tax assessments, homestead exemptions, capital gains taxes, non-resident tax implications, and transfer taxes, all governed by Florida statutes and local county regulations. For instance, an unexpected reassessment could increase your property taxes by thousands annually. Discovering these risks late can lead to deal renegotiations or even contract termination. Call me at 941.400.8735 or reach out directly to Michael Renick – I’ll share my approach with you.
What Actually Breaks Deals in Florida
Property Tax Reassessments
We could not have been more pleased with Eric Teoh and Mike Renick during our search and recent purchase of our home on Longboat Key. These guys are a breath of fresh air in today’s business environment operating with “old school” business practices Should we require a realtor in the future we would certainly engage them again. Len & Ann Cincinnati, Ohio
– zuser20170122200015417, Zillow Review
The problem arises when a property is reassessed at a higher value after a sale, leading to increased property taxes. Governed by Florida Statute 193, this can catch buyers off guard. In one case, a buyer faced a $3,000 annual increase in taxes when the county reassessed the property value post-purchase. The consequence was a forced renegotiation of the sale terms to account for the unexpected tax burden.
Homestead Exemption Misunderstandings
Florida’s homestead exemption, under Statute 196, can significantly reduce property taxes, but only if properly claimed. I once saw a deal nearly collapse because the seller had not informed the buyer that the exemption would not transfer, leading to a $2,500 tax increase. The buyer had to scramble to adjust their budget or risk losing their deposit.
Where It Usually Blows Up
These tax risks often surface during the final stages of underwriting or at closing. The timing is brutal because buyers have already committed significant resources and are often unable to back out without substantial financial loss. When these issues are discovered late, buyers may face increased costs, delayed closings, or even the need to walk away from the deal, forfeiting deposits and incurring legal fees.
What I Tell Clients Before They Risk Money
- Verify Property Tax Assessments: Always check the current and potential future property tax assessments with the county appraiser’s office.
- Understand Homestead Exemptions: Confirm whether the property currently benefits from a homestead exemption and how it affects future taxes.
- Review Capital Gains Tax Implications: Consult with a tax advisor about potential capital gains taxes if you’re selling a property.
- Check Non-Resident Tax Rules: If you’re a non-resident, understand how Florida’s tax rules will impact your investment.
- Confirm Transfer Taxes: Ensure you know who is responsible for any transfer taxes and how they will impact your closing costs.
Let’s continue this conversation.
Call me at 941.400.8735 or schedule a 15-minute call. I’ll tell you what I would look for.
Call 941.400.8735 or Schedule a Call
Questions Clients Actually Ask
What happens if the property tax assessment is higher than expected?
If the property tax assessment is higher than expected, it can significantly increase your annual tax bill, potentially by thousands of dollars. This can lead to a need for renegotiation of the purchase price or even cause the deal to fall through if the buyer cannot afford the increased costs.
We bought two units from Mike and Eric and sold one over the last four years. One thing that made life much easier for us was how they understood our feelings and situation regarding pricing. They knew where the other party was coming from, which made the process faster without all the back and forth. Once the contract was signed, their staff was great; I literally had to do nothing other than decide what color pen to sign with. Eric wasn’t just out to make a sale; he was tremendously helpful to us. Every week, he checks our apartment without asking for money, and when we had a storm, he even moved our car to safety. It wasn’t just about the sale; he became a friend and helped us out after the sale, just because we don’t live here.
– Mindy and Joe, Customer Review
Can I transfer the homestead exemption from the seller?
No, the homestead exemption does not automatically transfer from the seller to the buyer. You must apply for your own exemption, and failure to do so can result in a higher tax bill than anticipated.
What To Do Right Now
Request a copy of the current property tax bill and assessment from the county property appraiser’s office to verify the property’s tax status and any exemptions in place.
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