Ad valorem taxes, values and millage
An ad valorem tax is a tax based on the value of property (Fla. Stat. 192.001(1)). "Ad valorem" is Latin for "according to value." In Florida, counties, cities, school boards and special districts all levy ad valorem taxes on real property, and the bills are combined into one annual tax notice.
Three values to keep straight
| Term | What it means |
|---|---|
| Just value | Market value. In setting it, the property appraiser considers what a willing buyer would pay a willing seller in an arm's-length cash deal, along with use, location, size, cost, condition and income (193.011). |
| Assessed value | The value the law allows to be taxed. Often it equals just value, but caps such as Save Our Homes can hold it lower (192.001(2)). |
| Taxable value | Assessed value minus any exemptions (192.001(16)). This is the number the tax rate is applied to. |
A home might have a just value of $400,000, an assessed value of $310,000 because of the Save Our Homes cap, and a taxable value of $260,000 after a $50,000 homestead exemption. Exam questions often give you all three numbers to see if you pick the right one. Millage is applied to taxable value.
Millage
A mill is one one-thousandth of a dollar, or $0.001 (192.001(10)). A millage rate of 1 mill means $1 of tax for every $1,000 of taxable value.
Tax = taxable value × millage ÷ 1,000
A home with a taxable value of $260,000 in an area with a total rate of 18.5 mills owes $260,000 × 18.5 ÷ 1,000 = $4,810.
You can turn that around. If a $200,000 taxable value produced a $4,200 bill, the rate is $4,200 ÷ $200,000 × 1,000 = 21 mills.
A property is usually taxed by several bodies at once: the county, the school board, maybe a city and a water management district. Each sets its own millage. Add them for the total rate, unless a question tells you an exemption applies to some levies and not others. That happens with homestead, covered in lesson 3.
Who does what
- Property appraiser. The county officer who determines the value of all property (192.001(3)). The appraiser also reviews and grants exemptions such as homestead.
- Tax collector. The county officer who collects ad valorem taxes (192.001(4)). The tax collector sends the bills, takes payments, gives early-payment discounts and sells tax certificates when taxes go unpaid.
- Taxing authorities. The county commission, school board, city and special districts set the millage rates. The property appraiser does not set rates, and the tax collector does not set values.
- Value adjustment board (VAB). Each county has one, with two members of the county commission, one school board member and two citizen members (194.015). It hears owners' petitions about assessments, appeals of denied exemptions and complaints about homestead exemptions (194.032(1)(a)).
An owner who thinks the value is too high can talk informally with the property appraiser's office and can file a petition with the VAB. The VAB is the place to appeal a value or a denied exemption. It is not the place to complain about the tax rate, which elected taxing bodies set.
Common traps
- Assessed value vs. taxable value. Exemptions come off assessed value. If a question gives the assessed value and an exemption, subtract first, then apply the millage.
- Mills vs. percent. 20 mills is 2%, not 20%. Divide mills by 1,000 to get a decimal: 20 mills = 0.020.
- Roles. The appraiser values, the collector collects, and the VAB hears disputes.