With fluctuating market trends making 2023 less certain than years past, those interested in buying or selling their Valrico, FL, real estate may be unsure about factors like property taxes going into the next year. As the real estate market in Florida is still very active, it is likely that taxes will increase in towns like Valrico. Before explaining how to calculate property taxes and specific forecasts for Florida and Valrico, here’s what you need to know about the local real estate market.
Hillsborough County in general is experiencing a decrease in closed sales for single-family homes and an increase in inventory, indicating a cooling market. With this in mind, here’s what you need to know about property taxes in Valrico.
Review of property taxes
In the simplest terms, property taxes are extra fees on a property based on its value. These fees are used to fund public services like the police, firefighters, schooling, and garbage collection. Tax rates are set by a county or city and change from year to year. Property taxes are also commonly called real estate taxes and may include special assessment taxes or when the county raises funds for a particular project.
To calculate property taxes, an appraisal of the property is necessary. The area uses an assessment ratio, or a percentage of the property’s market value or appraised value, to come up with the value of the home that is taxable. From there, areas apply relevant property tax exemptions like homestead exemptions. Other possible exemptions include senior citizen exemptions, religious exemptions, and exemptions for those with disabilities.
After exemptions, your municipalities’ millage rate is applied to the taxable home value to calculate how much an owner owes. A mill rate is how much a homeowner pays in tax per $1,000 of the home’s taxable value. In Hillsborough County, every $1,000 of home value is taxed at $5.7913, although unincorporated areas like Valrico are currently taxed at $17.9049 per every $1,000.
Property taxes in Florida
Those wondering if there will be a Florida property tax increase in 2023 should brace for higher taxes. This is influenced by increasing property values, with homestead properties appreciating by about 28% within the year. Appreciation is a trend for all property types in the state, which are up by 25%. Another factor of appreciating prices and increased taxes is new construction, which has bumped up property values by 2.2%.
School taxable value in Florida increased by 20.1% this year, while county taxable value increased by 14.6%. However, the cooling market will work in property owners’ favor, as increasing home values are slowing with the end of the year. The county’s taxable value is projected to rise by 9.6% in 2023. Counties like Hillsborough don’t even have to raise millage rates for residents in the area to feel the effects of increased property taxes, as appreciation will increase the amount of taxable home value.
Those with non-homestead properties, or residences that aren’t occupied full-time by the owner, should specifically prepare for increasing taxes and fewer benefits. Those with vacation or second homes have higher assessment caps, as well as taxation categories without caps, like school taxes. Residents with homestead properties can enjoy more benefits but should still prepare for higher taxes in the new year.
Property taxes in Valrico
Valrico, FL, real estate owners are probably aware of the county’s high property taxes. In fact, Hillsborough County’s median property taxes are some of the highest in the US. Valrico follows the rest of Florida’s trends in appreciation rates which are some of the highest in the country. Properties in the area have an annual appreciation rate of 28.31%, which is higher than 99% of the towns and cities in the US. Although appreciation makes real estate in the area a valuable investment, it also means higher property taxes for town residents.
Given appreciation, as well as rates across the county and the state, residents or buyers in Valrico can expect higher taxes going into the new year. In the town, taxes are based on your property’s fair market value or how much it would sell on the market. Single-family homes currently have a median sales price of $415,000 in the county, although the figure may change based on your property type and location.
Valrico residents can take advantage of a homestead exemption, given they live on the property full-time. Owners need to submit the exemption to their county tax assessor specifically, as well as other exemptions that may apply to them. Another part of property taxes in the county is the Hillsborough County Personal Property Tax, which is used to fund local projects. However, such taxes can be deducted from a resident’s Federal Income Tax Return.
What to do as a buyer or seller
As a buyer or a seller in Valrico, working with an expert and local real estate agent like those at the McIntosh Group is the best first step. They’ll have resources available to help you understand the impact of property taxes on your purchase or sale, as well as market information to help you estimate the taxes you’ll likely inherit as a buyer. Additionally, an agent can help you understand local market trends, which is important in timing and pricing your property’s sale or your offer as a buyer.
Ready to search in Valrico?
Those living or searching for properties in Valrico can expect increasing property taxes going into the new year, regardless of if the millage rate increases or not. When you’re ready to sell your property in the area or want to start your search, contact local agent Jason McIntosh at The McIntosh Group to guide you through the process.