My property tax went from $ 15k in a 91k life change per year

Walter and Debbie Priebe thought they were doing the right thing.

Their home at Pompano Beach, FL – which they bought in 2002 from Walter’s father – needed serious repairs. The walls were infected with termites. The roof was failing.

But more than that, the house kept deep emotional value: their late son had made the lead himself, and the house was placed in the water, complete with a seas and boat lift that would add over the years. A dreaming home of making them.

In 2021, Priebes decided to renovate the future in mind. They would fix the roof and add a second story, making room for action in place while preserving the sentimental roots of the structure.

Debbie, who had worked for a real estate lawyer for nearly 25 years, predicted that their property taxes could increase.

But when the final tax bill arrived in 2023 as the construction was complete, their taxes had increased from $ 15,000 a year to more than $ 90,000 – six times their previous bill, and almost double what they had appreciated their new taxi liability.

Reason? Their remodeling had caused a complete reassessment of the value of the property, and the high question for homes in their neighborhood was prices of high homes in the sky.

While Priebes had bought the house in 2002 for $ 650,000, it was now rated over $ 4.4 million.

At the core of the story of Priebes is a concert of factors that are being quiet under the surface of the housing market.

While national conversations on affordability have focused heavily on mortgage rates and buyers for the first time, another crisis has gained steam: property taxes are becoming unaffordable, even for owners of long homes that have been located for decades.

REPRICING

Priebes knew that their property tax protection was in danger. In Florida, the exemption of the house reduces the taxable value of a primary residence up to $ 50,000, while Save Homes CAP limits the annual increase in the estimated value to 3% or the consumer price index – whatever lower.

So, before the renovation began, they responded to the Broward District Property Evaluation Office to confirm those protection would remain in place while they move temporarily during construction – a step confirmed in the documents reviewed by Realtor.com®.

“We thought that if we were to keep the foundations and other walls of the house and just got the roof, it was our understanding that we would preserve our homes and our hometown,” Debbie says.

Their hope was, when they moved home again, only the value of the new addition would be reassessed to the current market value, not the property as a whole.

But renovations – removing the roof, adding a second floor – ultimately caused a complete reassessment of the home value. According to the law in Florida, after a property is considered significantly improved, it can be treated as a new construction, removing the protection that had captured the valued home value for years.

“They called this a whole new home. Now, if you look at the tax list, we have owned the house since 2022,” she says. In fact, Priebes have owned the house since 2002.

APPEAL

Priebes fought county evaluation using their contractor bills, evaluation documentation and historical improvement data. However, the final value estimated – based on the latest sales, not the cost to build – stayed.

“We had a magistrate who actually agreed with us,” Debbie says. “But he said,” Unfortunately, I can’t do anything about it. “”

This is because the law in Florida requires that the county estimates reassess a home property of fair value – in essence, market value – after essential improvements are made. Essential improvements include things such as extensions and major structural changes, not cosmetic improvements, explains Mila Schwartzreich, general adviser to broward circuit assessors.

From the point of view of the county evaluator, treating situations like Priebes’ is a balance. The law requires market -based estimates. But local officials are often caught between the letter of law and its consequences in the real world.

“We have the law to be reconciled,” says Schwartzreich. “Really puts us in the middle.”

The whole money factor

But what is increasing market values ​​so high that a reassessment can cause such a dramatic change in tax burden? It turns out that Priebes were against another factor that is transforming the housing market.

Pandemia Covid-19 brought about an increase in the prices for setting overseas records for houses in Florida. Shortly before Priebes finished their renovation, a neighboring house was sold for $ 4.9 million, and Debbie immediately sent trouble.

“Cash bids are usually the product of highly competitive housing markets,” explains Hannah Jones, high economic research analyst for Realtor.com. “Buyers use offers for all money to earn in a multi -offer scenario, signaling a level of competition that goes in parallel with the rise in the price of the house.”

And while that home price increase is usually seen as a net positive for homeowners because it adds to their capital, it can be an Albatros for those who cannot afford the highest property taxes that come with it.

In 2002, when Priebes bought their home for $ 650,000, 37% of home transactions were bought with all the money – much higher than the national share of 15% of sales. By 2023, when Priebes was hit with their shocking tax bill, 62% of home sales in their ZIP code were made in all cash, according to Realtor.com data.

“Large budget buyers are more capable of participating in today’s high -priced housing market, and these buyers are more likely to buy higher prices and pay house sales prices, running higher home sales and all higher cases,” Jones explains.

But evaluators still need to factory these sales in their estimates. Money sales are considered valid by law in Florida, even if the buyer paid above by asking, Schwartzreich explains.

A great cry for the reform

One thing to talk about market dynamics. But for priebes, the shares are of real pain: their home is in line -and they are not alone.

“You don’t have to be in a situation where you have to give up your home because you can’t afford taxes,” Florida Ron’s governor recently said at a roundtable to facilitate property taxes in the state.

Desantis has expressed support for eliminating property taxes entirely – a comprehensive proposal that is promoting debate. But such a change faces steep obstacles. Property taxes are the only largest source of revenue for local government, funding essential services such as public schools, first responses and infrastructure.

Still, for families like Priebes, relief cannot come soon.

“We weren’t doing this for money,” Debbie says. “We did this in an effort to preserve our home and stay in order to retire here.”

Their annual tax bill $ 90,000 can ultimately try hard to keep. But they are hoping that the moment around the reform can come in time to help them stay in the house where they have poured decades of love and savings.