BUILDINGS RISE, AND SO DO VALUES — Although building has slowed or stopped in other parts of the country, Central Florida continues to see robust construction activity and plans for more. One example is the vertical action at Integra Myst, a 600-unit apartment complex on the north side of Epic Theatres in Deltona.
According to someone who’s in the know, it looks like land and building values in Volusia County — residential, commercial, agricultural and undeveloped — are poised to increase again in 2023.
However, Volusia County Deputy Property Appraiser Jan Cornelius said the increases may not be as dramatic as in recent years.
“It’s hard to say right now,” Cornelius told The Beacon as the new year dawned. “I think the market has slowed, and I don’t think we’ll see the increase we’ve had last year. I would say the increase will be the average of 4 to 5 percent.”
That would greatly contrast with the big jump logged in 2022. The “just value” — the estimated market value — of all land and improvements in Volusia County increased by an astounding 23.7 percent in only one year!
The county’s just value amounted to $68.6 billion in 2021, and now stands at $84.9 billion. That was the number certified for 2022 and submitted to the Florida Department of Revenue in October.
Local governments keep a close eye on the increases, which can be a windfall to a city or county collecting property taxes based on property values — otherwise known as ad valorem property taxes. Of course, rising values may also offer an opportunity for those agencies to lower their tax rates.
Once the Property Appraiser’s Office figures the just value, its staffers can calculate the taxable value, also known as the tax base or tax roll.
The tax roll is the grand total of all private property subject to taxation, whether residential, commercial, agricultural or industrial or institutional, not counting nontaxable property like churches, or the value of exemptions, such as homestead exemptions.
Volusia County’s taxable value jumped from $42.7 billion in 2021 to $48.8 billion in 2022 — a 14.2-percent increase in the tax roll.
One of the unknowns in trying to look ahead to the future property values is determining the effects of the damage from hurricanes Ian and Nicole.
RISE AND FALL — This graph shows the rise and fall of Volusia County property values —
just, or market, values (in blue) as well as taxable values (in orange) — from 1998 to 2022.
“Any adjustments come off the just value,” Cornelius said.
The Property Appraiser’s Office has estimated that Ian inflicted damage in Volusia County of approximately $357 million. The property damage caused by Nicole was about $495 million — a potential reduction in the countywide just value of almost $850 million.
“Most of the damage is on the east side,” Cornelius said. “Ian did some damage, and Nicole finished it.”
In determining the market values of properties, Cornelius said, county appraisers take into account the condition of the land and improvements on Jan. 1 of each year, so hurricane damage will show up in the 2023 tax roll, but didn’t reduce the property values for calculating the 2022 taxes.
However, the Florida Legislature is allowing certain homeowners who were displaced by the storms to seek tax relief.
“If anybody was out of their home for 30 days or more, they can apply for a refund of taxes,” Cornelius said, adding the refund will be pro-rated. “They can apply. The taxes are for homesteaded property. It can’t be for rental property.”
When the Property Appraiser’s Office determines the just value and the tax roll, Cornelius said staff appraisers check aerial photographs and go to particular locations and addresses.
“By law, we have to review every property every five years,” she added. “We’re out there.”
Looking at the local real estate scene, Cornelius said there is a noticeable decline in the frenzied buying and selling of just a few months ago.
West Volusia Realtor Bee Powell also has seen a cooling of the market within the past six months or so.
“In general, the prices have not dropped,” Powell said, but prospective customers are more selective.
Gone, for now at least, are bidding battles for homes, when sellers could expect to receive offers above the listing prices of their homes.
“Buyers are dealing with a number of issues,” Powell said, adding the increases in interest rates are already affecting the markets. “The high prices affect affordability. Not only the prices [of homes], but they’re also dealing with high insurance rates and taxes. Inflation and the high cost of living.”
Powell describes the convergence of these cost pressures on buyers’ budgets as “the perfect storm.”
“It was kind of a mixed year. We had a stronger market in the beginning of the year,” Cornelius said.
Real estate prices have declined and home construction is slowing or at a halt in some parts of the country, as rumors of a recession circulate. Maybe not so much so in the Sunshine State.
“I think it’s different in Florida. We’re seeing homes stay on the market longer,” Cornelius said. “We’ll have to see how the interest rates affect the market.”
In Volusia County, construction activity remains robust, and that may offset the storm damage and misgivings of some prospective buyers. Residential building activity in the Sunshine State is still trying to keep pace with the influx of new settlers who need homes. Deltona and DeLand, among other
places, are seeing continued planning for future housing projects.
While Powell and her fellow Realtors may not be as busy showing properties and writing contracts as they were just a few months ago, Powell is optimistic.
“We dropped about 20 percent in sales volume,” she said, looking back over the past few months.
The 2023 real estate market, Powell predicted, will likely bring “stable prices, and a little appreciation” in values.
“Real estate is cyclical,” she said. “There is no real estate crash on the horizon.”
A few facts about exemptions
• Some properties, such as churches and those owned by nonprofit organizations, are wholly exempt from ad valorem taxation. They
do not pay taxes based on the millages levied by local governments or special agencies such as the School Board or hospital-taxing districts. They may, however, be required to pay special assessments for such things as
stormwater control or solid-waste collection and disposal.
• Other privately owned properties, especially dwellings with homestead exemptions, are subject to ad valorem taxation at reduced rates. Besides the standard homestead exemptions guaranteed under the Florida Constitution, extra tax breaks may be given to widows or blind homeowners.
• Some businesses may be partially exempt from some ad valorem taxes. Ad valorem is a Latin phrase meaning “according to value.”
At the request of Amazon, for example, the company was given a partial exemption for its distribution center in Deltona from some of the property taxes imposed by the city for the first few years of its operations. The tax benefit came in exchange for Amazon’s promise to create jobs at the warehouse.
• Though they are residential in terms of zoning, apartment buildings are counted as commercial property and taxed at their market value without the homestead exemptions given to homeowners.
