On December 20th, 2017, President Trump stood outside the White House and announced that Congress had passed the Tax Cuts and Jobs Act (“Tax Act”), the most thorough overhaul of the federal tax code since the Reagan administration. Like American taxpayers everywhere, most Floridians are wondering:

How will this tax legislation affect me?”

Because the most significant investment for most Americans is their home, this blog post explores how the legislation will affect home-owning taxpayers.

Capital Gains Tax on Primary Residences

One of the main concerns of home-owning taxpayers regarding the tax overhaul was whether Congress would alter the current tax treatment of capital gains taxes on the sale of primary residences. In many instances, the IRS treats the gain from real estate transactions, such as the sale of a vacation home, as taxable capital gains income. However, § 121 of the Internal Revenue Code provides an exception that exempts from taxable income up to $250,000 in capital gains for homeowners selling their primary residence. Much to the relief of homeowners and the homebuilders’ lobby, Congress did not change this provision.

Mortgage Interest and Property Tax Deduction

While Congress did not change the capital gains treatment of the sale of primary residences, Congress did make two notable changes affecting popular deductions for property taxes and mortgage interest. First, with respect to the mortgage interest deduction, Congress amended § 163(h)(3) of the Internal Revenue Code to reduce the amount of borrowed money used to purchase a home (mortgage debt or “acquisition indebtedness”) on which homeowners can deduct the interest from income.

Under the previous tax rules, homeowners could deduct from income the interest paid on the first $1,000,000 in acquisition indebtedness ($500,000 if married filing separately). The Tax Act lowered to $750,000 the amount of acquisition indebtedness on which interest deductions are allowed ($375,000 if married filing separately). It is important to note that mortgage debt incurred before December 15, 2017, is grandfathered in under the older $1,000,000 limitation. Also grandfathered in under the $1,000,000 limitation are taxpayers who had signed contracts on or before December 15, 2017, to close on the purchase of a primary residence before January 1, 2018, so long as the purchase is actually closed before April 1, 2018.

Second, Congress placed a cap on the amount of state and local income taxes and property taxes that taxpayers can deduct on their federal tax returns. Under the previous tax rules, taxpayers could deduct from their income unlimited amounts of state and local income taxes, state and local real property taxes, and state and local personal property taxes paid in the taxable year. The Tax Act amends § 164 of the Internal Revenue Code by reducing the amount of state and local taxes taxpayers can deduct from income to the first $10,000 in state and local income and property taxes ($5,000 if married filing separately). This change represents a significant adjustment and most significantly affects taxpayers in high income-tax states. Fortunately, we have no state income taxes in Florida. However, the $10,000 limitation on deduction of property taxes will still affect Florida homeowners paying property taxes above that amount.


Beginning in 2018, many taxpayers, but not all, will start to see federal income tax relief and lower federal income tax bills. However, while the Tax Act changes provisions that benefit some taxpayers, some changes in the Tax Act will be detrimental to other taxpayers. To know more about how the Tax Act will affect you, you should consult with a tax professional. If you have any questions regarding the Tax Cuts and Jobs Act and its effects, please contact Caleb Hinton at caleb.hinton@henlaw.com or Paul Shuman at paul.shuman@henlaw.com.

As of January 1st of 2017, it has been reported that the total value of real property in Lee County increased for the fifth consecutive year to $105.6 billion (nearly 9% higher than 2016 values).

With this year’s Truth in Millage (“TRIM”) Notices just around the corner (typically mailed by the Lee County Property Appraiser in mid-August), one recent legal opinion highlights the nuances of remedies available to the property owner—and the Property Appraiser—in the event assessed values are contested.

Background on Florida’s “Save Our Homes” Doctrine

For real property that has been classified as a “homestead” in Florida, the Save Our Homes provision of Section 193.155(1), Florida Statutes, allows for an annual increase of only 3% in the assessed value of property, or the yearly increase in the Consumer Price Index (CPI), whichever is less. Moreover, under 193.155(2), Florida Statutes, if the capped value exceeds the market value in a given year, the capped value will be reduced to the market value.

Nikolits v. Haney

Continue Reading Homestead, Save Our Homes, and Corrections to Assessed Value: Are You Ready for Your 2017 Property Taxes?

tax burdenThose owning real property in Lee County have likely received their annual TRIM (Truth in Millage) Notice. We have found that some questions continue to repeat every year once taxpayers receive their TRIM Notices.

To help taxpayers understand what the TRIM means for them, we thought it would be helpful to go through a few quick tips for what to look for when reviewing this important document: Continue Reading Helpful Tips for Reviewing your TRIM Notice

The Foreign Investment in Real Property Act of 1980 (mercifully shortened in real estate and tax circles to “FIRPTA”) is a federal law designed to collect taxes on a foreign seller’s “disposition” of real property held in the U.S. The Act casts a wide net and applies not only to the sale of both commercial and residential properties, but also other real property interests such as swimming pools, mines, crops, and timber, just to name a few. Besides the typical sale of real property, the Act also extends to foreclosures and corporate mergers/reorganizations, among other “dispositions” of real property.

Foreign Investment on the Rise

With both residential and commercial real estate prices rising, but still deflated from the highs in 2008, both the U.S. as a whole, and Florida in particular, have experienced an influx of foreign investment in real estate.

Continue Reading Increase in Foreign Investment = Increase in Tax Implications for Florida Real Estate Buyers

As those of us with school-aged children start frantically counting our last days until the new semester begins, we can be reminded that it is also that time of year when the county property appraisers begin to mail out the annual TRIM notices to notify taxpayers within their jurisdictions of the proposed property taxes for the current tax year.

Most property appraisers mail out the TRIM notices in mid-August, which starts the appeal period. There is a fairly narrow window to file an appeal to your TRIM, with the appeal period ending early-to-mid September. The exact date can vary by jurisdiction so be sure to look closely at your TRIM notice to determine when your appeal period ends. Thankfully, many jurisdictions have streamlined the appeal process, with many counties allowing now for online filing of appeals. Again, you will need to check your TRIM notice to determine whether your county offers this.

With the Southwest Florida real estate market rebounding, you are likely to see some slight increases in your property values. Be sure to check the information listed for your property to ensure that all information is correct and current to avoid any mistakes in your assessment.

For those of you in or near Cape Coral, consider attending the Cape Coral Construction Industry Association August 8th dinner meeting where TRIM notices will be briefly discussed. For more details, see registration flyer: CCCIA 2013 August Dinner Meeting Flyer.pdf.

tax.jpgIn the past few months, several clients have contacted me with questions regarding property that had been obtained through tax deeds. For example, one client contacted me to discuss property that had been purchased from an individual who obtained the property through a tax deed sale two years earlier. At the recent purchase, the client had obtained an owner’s title policy; however, there was an exception to this policy for anyone claiming by, through or under the prior owner whose title to the property had been disgorged by the tax deed sale. My client intended to develop the property into a multi-unit residential complex and wanted to be certain that they could provide clear title to the eventual third-party purchasers.


Prior to a property being sold at auction via a tax sale, several things must have occurred or, in some cases, not occurred. By way of example, let’s say that “Adam” is an individual who owns a 10 acre tract of vacant land in Lee County, Florida. After the 2008 real estate crash, Adam fell on hard times and failed to pay the 2008 ad valorem taxes due and payable on March 1, 2009. On April 1, 2009, the taxes for Adam’s property were deemed delinquent and the tax collector, as required by law, advertised Adam’s property (along with other delinquent properties) once a week for three consecutive weeks for the sale of a tax certificate on the delinquent 2008 taxes. Once the delinquent properties had been properly advertised, the tax collector established an on-line auction for a tax certificate for the delinquent 2008 taxes.

Continue Reading Tips for Understanding Tax Deeds and Tax Certificates

It’s that time of year again – the time we rush to our mailboxes to see if today’s the day we receive our TRIM (truth in millage) notices from the Lee County Property Appraiser showing our proposed property taxes for 2011.

Generally, the TRIMs are mailed mid-to-late August and contain a lot of information you should be aware of. Specifically, once you receive your TRIM, take notice of the following:

  • the proposed assessed value of your property;
  • the deadline to file any challenges administratively – this date is 25 days from the date the TRIM is mailed so you don’t have a lot of time;
  • the dates of hearing for any particular taxing authority if you disagree with the proposed tax rate; and
  • be sure your property address and STRAP (parcel identification) number are correct – otherwise, you may pay tax on the wrong property!

It is also important to note whether any exemptions you may qualify for have been correctly applied. Your TRIM will contain contact information for Property Appraiser staff who can assist you with specific questions you may have. Henderson Franklin’s Land Use attorneys may also be able to assist you with any appeals you may decide to file.

In my household, a letter from the county property appraiser or the county tax collector is typically met with a “what-now” groan because it’s rare for good news to come from those offices. If you’re an agricultural land owner, you may have recently received such a letter from your local property appraiser notifying you that your agricultural tax classification for the 2011 tax year has been denied. And while a groan may be the proper response, tossing this letter in a pile and ignoring it is not – because you now only have 30 days to appeal this denial to the county’s Value Adjustment Board.

An agricultural classification can save a property owner tens of thousands of dollars in property tax owed to the local government, and according to the Lee County Property Appraiser’s Agricultural Division, agricultural classification denials for Lee County were mailed on or about June 27, 2011. Typically, the rationale for denial is that the property is not being “used primarily for bona fide agricultural purposes” as required by F.S. 193.461(3)(b). Any appeal of this determination must be timely filed, and evidence and testimony must be presented at a hearing to support the contention that a bona fide agricultural use existed on the property as of January 1, 2011. The statute sets forth 7 factors to be considered in determining whether a “good faith commercial use of the land” was in place:

  1. The length of time the land has been so used.
  2. Whether the use has been continuous.
  3. The purchase price paid.
  4. Size, as it relates to specific agricultural use, but a minimum acreage may not be required for agricultural assessment.
  5. Whether an indicated effort has been made to care sufficiently and adequately for the land in accordance with accepted commercial agricultural practices, including, without limitation, fertilizing, liming, tilling, mowing, reforesting, and other accepted agricultural practices.
  6. Whether the land is under lease and, if so, the effective length, terms, and conditions of the lease.
  7. Such other factors as may become applicable.

These appeals can become extremely complicated, and without the presentation of competent, relevant evidence and testimony, a property owner’s chances of success can be very low. So, if you tossed that denial letter in a “to-do” pile, dig it out and consider whether you would like to appeal the denial. The filing fee to appeal the denial is as low as $15, however waiting too long to address the issue can be quite costly.


The landscape of Florida has seen rapid change over the last several decades, and none has been more drastic that the urbanization and development of Florida’s farms and agricultural areas. With increased development comes higher property values and increased property taxes. In an effort to assist farmers and agricultural landowners, the Florida Legislature passed bills that became known as the Greenbelt Laws, providing a property tax break for agricultural lands.

128px-Angus_mix.JPGCurrent laws allow for an agricultural tax classification for bona fide, commercial, agricultural use of land. Over the years, Florida courts have been called on to determine the balance between the tax benefit provided to agricultural landowners and the need for cities and counties to accurately assess non-agricultural lands and collect the taxes for municipal services. Today, it is not uncommon for a county and a landowner to disagree regarding the bona fide nature of a use, or the extent of that use on the property. For example, a property appraiser may deny the classification on a property because he feels that there are too few cows grazing on the land, or not enough has been done to properly care for the land.

So what can a landowner do to ensure that his or her agricultural classification is granted?

  • Know the commercially-accepted practices for the type of agriculture you are engaged in. For example, if all cattle ranchers mow and seed their pastures annually, following these practices may support the contention that a property should be granted the classification.
  • Ensure that there is documentation regarding the improvements or activities that are part of the agricultural operation, including any lease agreements. Some owners hire professional property managers to ensure that the agricultural use is managed properly.  
  • Communicate with the property appraiser’s office before a determination regarding the classification is made can be beneficial, as well, so that a property owner may provide additional documentation or information that will be persuasive.

Ultimately, if a property owner cannot convince the local property appraiser that a property should receive an agricultural classification – and a drastically lowered tax bill – the owner must seek appeal to the Value Adjustment Board. This appeal process generally hinges on the evidence and testimony related to the agricultural use, making it even more important to keep documentation regarding activities and expenditures related to the agricultural use. 

The filing period for submitting applications for ad valorem property tax exemptions to the county Property Appraisers opened January 1, 2011.  If you believe you might qualify for such exemption for your 2011 property taxes, you must file your application with the Property Appraiser before March 1, 2011.  The two most common exemptions applied for include:

The filing period for submitting applications for ad valorem property tax exemptions to the county Property Appraisers opened January 1, 2011. If you believe you might qualify for such exemption for your 2011 property taxes, you must file your application with the Property Appraiser before March 1, 2011. The two most common exemptions applied for include:

  • Homestead Exemption: Those who qualify for a homestead exemption can seek up to two (2) $25,000 exemptions (for a potential combined total of $50,000) from their home’s assessed value. Basic criteria are that the applicant is a bona fide Florida resident possessing title to the property and residing at the property on January 1, 2011 as their permanent residence. There are other criteria and many exceptions as well.
  • Agricultural Exemption: The property must have been used for a bona fide commercial agricultural use as of January 1, 2011. The applicant is asked to submit various supporting information, including financial documents, to support an agricultural classification on the property.

Other ad valorem real property exemptions include, among others:

  • Senior Exemption
  • Widow/Widower Exemption
  • Veterans Disability Exemption

There are a host of exemptions applicable to tangible personal property as well. Applications for these exemptions, as well as additional information on each, can be found on your local Property Appraiser’s website.

For those interested in some recent case law addressing the homestead and agricultural exemptions, see below.

Continue Reading Property Tax Exemption Filing Window Now Open – Be Sure to File Before it Closes!