It’s late August and owners of Florida property are starting to receive their TRIM Notices in the mail. For those unfamiliar with the term, TRIM stands for Truth in Millage. The Florida Legislature passed the Truth in Millage Act in 1980 to allow the taxing authority to inform tax payers about the amount of tax liability owed. Owners of residential real estate, commercial real estate, land and essentially every type of real property receives this from their County Property Appraiser.
Millage can be a confusing term. It is a tax rate levied on real estate or other real property. It’s called millage because “mil” is one thousandth of a dollar. In this case, it represents the number of dollars of tax assessed for each one thousand dollars of property value. For example, if your millage rate is 11, you will be assessed $11 dollars for every one thousand dollars of property value.
When you receive a TRIM Notice, there is not anything you as a property owner are required to do immediately. Unless, you want to contest your property value. Good real estate brokers and property managers help property owners create value by helping those owners contest their property value. Contesting a property value must be done in a very specific way. One way is to evaluate the income of a property. This could be especially relevant because of the COVID pandemic which has forced many business to close their doors, in turn, reducing the amount of property income. With this approach, you apply a market CAP rate to the properties net operating income (Revenue less Operating Expenses). Depending on the market capitalization rates for each sector i.e. retail vs office, you could come up with a property value that is less than what your local property authority assessed it for. This data should be collected and presented to the proper authority (your County). If the County agrees, they will lower the assessed value which then lowers the amount of tax you owe. As a side note, the income approach cannot “hurt” the owner meaning if that approach yields a higher value than the assessed, the County will not raise the assessed value.
Knowing how to contest a TRIM Notice properly, is relevant for owners of both residential and commercial property. Beck Partners frequently works with property owners to contest property values at the County level. Their years of experience, relationships and depth of their team well-positions them to help property owners save money and create value for their property. Property taxes are considered, for the most part, a fixed operating cost because the owner has very little control over the amount. However, if it is dealt with strategically, this is an instance where the property owner could save money on their property taxes.
With a Property Management team of accountants, technicians, and managers, Beck Partners provides comprehensive property management, leasing and related services for income-producing properties owned primarily by institutional investors, along with facilities management services for corporate users. For specific questions about your leases, common area maintenance fees, and other property management, or commercial real estate, contact Chris Cobb, Beck Partners Property Manager at (850) 477-7044.