Below is the e-mail that I have received from a gentleman buying an oceanview unit for $45,000 in Plaza Resort & Spa in Daytona Beach. I thought the question could be of interest to anyone buying a condo-hotel (and not only a condo-hotel) in Daytona Beach area.
What is the tax rate. Are the units at the Plaza taxed on what you pay for them ...or a higher amount. What do you think unit xxxx will be taxed at if it sells. What is it currently taxed at?
Though what you paid for a property in Florida significantly affects your tax, it is not simply a percentage of the purchase price. The tax is a percentage of the taxable value set by Taxing authority. In Florida to determine the amount of the tax you need to know two things (besides the address of your property - LOL): it is taxable value and millage rate.
Taxable value is not necessarily the same as just value (the closest parameter to Fair Market Value). Because of the Homestead, and Save Our Homes Cap, which cap the annual increase in property tax, taxable value could be less, but for condo-hotels it is irrelevant as you can only homestead your primary residence and Plaza Resort & Spa cannot be your primary residence.
To find out your taxable value, follow the link to the Volusia County Property appraiser office website and find the property using the name of the owner, or address, or Parcel Identification Number, etc. Then on the upper part of the page with property description (third from top on right) you will see the Millage rate (22.98119), and if you scroll further down to History of Values, go to the very last column on the right (NS TXBL) and that would be your taxable value, which, for this particular unit (and last sale price was $251,346 in March 2006) is $70,748, and it is a big drop from $115,980 as Taxable Value for 2008.
So, Taxable value is the value of the property in the eyes of the taxing authority for the budget purposes. Millage rate is the rate at which it is taxed. 22.98119 millage rate for taxing area where Plaza Resort & Spa is means that the tax for 2009 was calculated at $22.98 (rounded) for $1,000 of value, where value was $70,748. Hence the Tax amount is $1,625.87. That will be if you pay it in March of 2010. If you pay it when you first receive the bill in November, then you will have a 4% discount, which decreases with time until it is a full amount of $1,625.87.
"The average total millage (tax) rate in Florida is 21.88 mills--meaning $21.88 per $1000 of a property's taxable value. Cities, counties and schools districts are subject to a constitutional limit of 10 mills for operating purposes. Local voters may authorize millage rates in excess of the 10 mill cap." (Property Taxation in Florida).
But I still can't answer what your tax will be next year. The rule is that buyer's taxes are usually different from Seller's taxes. Either direction, but different. Will the lower price you are going to pay affect the value? It will, but only in conjunction with the values of other units. If every other unit is sold for $300K, and you bought your unit for $30K, do not expect your tax to be 1/10th of their tax, it will most probably be the same. For the last few years the taxable value was going down. Eventually it will start going up. When it will be so high that you can't pay it, rejoice: it means that the value is through the roof and now you can sell for a lot of money.
If you need help figuring out your taxes in Daytona Beach area in general and in Plaza Resort & Spa in particular, call me at 386-405-4408. And if you want to get a vacation property for what others paid as downpayment, call me right away.