Major Renovation Leads to Skyrocketing Property Taxes for Florida Homeowners

Walter and Debbie Priebe, long-time residents of Pompano Beach, Florida, found themselves facing an unexpected financial burden after deciding to renovate their beloved family home. Purchased in 2002 from Walter’s father, the house held cherished memories, including plumbing done by their late son. However, years of neglect had taken their toll. Faced with termite infestations and a deteriorating roof, the Priebes aimed to modernize their home while ensuring its sentimental value remained intact.

A Renovation with Consequences

In 2021, the Priebes undertook substantial renovations, which involved fixing their roof and adding a second story. With Debbie’s extensive experience in real estate, they anticipated a modest increase in property taxes. However, upon completing the renovations, they were shocked to discover their annual tax bill had surged from $15,000 to over $90,000—an alarming six-fold increase.

Why the Spike?

The increase stemmed from a complete reassessment of their home’s value due to the renovations. Originally bought for $650,000, the property was reassessed at over $4.4 million—reflecting not only the renovations but also the soaring demand for housing in their neighborhood.

Understanding Florida’s Property Tax System

Florida law governs property tax assessments closely, especially in cases of substantial improvements. Here are the salient points regarding property tax protections in Florida:

• Homestead Exemption: Reduces the taxable value of a primary residence by up to $50,000.
• Save Our Homes Cap: Limits annual increases in assessed value to 3% or the Consumer Price Index, whichever is lower.

Before commencing their renovations, the Priebes sought confirmation from the Broward County Property Appraiser’s Office that their tax protections would remain intact during the construction period. They believed that by preserving the foundation and outer walls, the only reassessment should apply to the new addition.

The Appraisal Surprise

To their dismay, the renovations triggered a complete reassessment under Florida law, which considers any substantial improvement as new construction. This change effectively nullified their long-standing property tax protections, prompting the appraiser’s office to classify their home as a new structure.

Debbie recounts their experience, stating, “We thought if we kept the foundation and the outer walls, we would preserve our Save Our Homes exemption. They called this a brand-new house.”

Challenging the Assessment

In an effort to fight against the county’s valuation, the Priebes presented documentation, including contractor invoices and historical records of improvements. Unfortunately, despite their compelling case, the final assessed value remained unchanged.

A magistrate agreed with their argument but explained, “Unfortunately, I can’t do anything about it.”

The Impact of Local Market Dynamics

One of the driving forces behind the Priebes’ situation has been the influx of buyers willing to pay exorbitant prices for Florida properties. Influenced by the COVID-19 pandemic, many out-of-state buyers have entered the market with all-cash offers, driving home prices to unprecedented levels.

• Just before the Priebes’ renovations, a neighboring home sold for $4.9 million—alerting Debbie to the precarious market dynamics at play.
• A study from Realtor.com indicates that in 2002, 37% of home transactions were all-cash. By 2023, that number had skyrocketed to 62%.

The Call for Reform in Property Taxes

For families like the Priebes, the sudden surge in property taxes poses a dire challenge. As Florida Governor Ron DeSantis recently stated, “You should not be in a situation where you have to give up your home because you cannot afford the taxes.”

DeSantis has proposed eliminating property taxes entirely, sparking vigorous debate about the feasibility and potential impact of such a measure—which serves as a critical revenue source for local governments and essential services.

Conclusion: Seeking Solutions

The Priebes’ experience highlights a growing concern for many long-time homeowners in Florida: rising property taxes that can threaten their ability to remain in their homes. With their heartfelt renovation aimed at preserving cherished family memories, they now face the possibility of being priced out of their dream home.

As they continue to advocate for property tax reforms, the Priebes hope action will be taken soon to ensure that other families do not face the same fate.

For more information on understanding Florida property taxes and housing market trends, visit Realtor.com and Broward County Property Appraiser’s Office.