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'Ad Valorem' is a term derived from the latin phrase meaning 'in accordance with its worth'. In Collier County, Florida, Ad Valorem taxes are collected by the Collier County Tax Assessor. Ad valorem taxes include taxes on real estate and on a business's tangible personal property.
Real estate ad valorem taxes
Real estate ad valorem taxes are expressed in millage rates. The millage rate is basically the tax per thousand dollars of the taxable value of your property as determined by the Collier County Property Appraiser. The Property Appraiser weighs such factors as market value, location, usage, etc. to arrive at the property's taxable value. The tax can be calculated with the formula taxable value / 1000 x millage rate. For example, if the millage rate is 9 and the taxable value of your property is assessed at $100,000, the amount of the tax would be $900. A mill is one-tenth of one percent (or one one-thousandth) of the property's value. The millage rate is determined by the Collier County Commissioners and other governmental agencies.
Non-ad valorem taxes are also assessed in cases of district-wide improvements and other special expenditures that get their funding from special taxes.
Tangible personal property taxes
Property that falls under this tax is all personal property owned by a business, including furniture, fixtures, equipment and machinery. Owners of rental properties are subject to tax on furniture fixtures, appliances, non-central air conditioning, carpet, maintenance equipment, etc. The tax rate is simply computed by multiplying the assessed value of the personal property by the millage rate. The value of the property is determined by the property owner and reported on a tangible personal property tax return. These tax returns must be filed with the Collier County Property Appraiser before April 1st of the tax year. There are penalties for failure to file a return.
Collier County is divided up into approximately 292 separate tax districts, each with its own millage rate.
For tax purposes, the calendar year starts January 1st. Ad valorem taxes are due in November of that year and are considered delinquent of not received by April 1st of the following year. In Collier County, early payment of taxes is rewarded with a discount on the amount of tax due. Payments made in November earn the taxpayer a 4% discount which decreases by 1% each succeeding month until March when the full tax is due. On April 1st the tax becomes delinquent and a penalty is added to the gross tax amount. Collier County mails out tax notices on October 31st of each tax year.
The Homestead Exemption
All homeowners in Florida who reside in their home as their permanent residence are eligible for this exemption. The exemption entitles you to a reduction of $25,000 from the assessed value of your property. In other words, after the Property Appraiser assesses your property's taxable value, $25,000 is subtracted from that amount before the property tax is calculated. To qualify for the homestead exemption you must be a permanent resident of Florida as of January 1st of the year you apply for the exemption.
The Save our Homes Act
Florida places a cap on property tax increases for homeowners who reside in their home as their permanent residence. The 3% cap is known as 'Save Our Homes' (SOH). It was enacted as a constitutional revision effective January 1, 1995. The Save our Homes Act limits the increase in the assessment of homesteaded properties to 3% or the Consumer Price Index (CPI), whichever is less. So, as long as you are living in your home as your primary residence and your have applied for the homestead exemption, the amount of increase in your taxes from year to year will be capped at this limit, regardless of how much the actual taxable value of your home increases during that time. When your home sells, however, the cap is removed and the new owner will revert back to the full assessed value of the home when tax time comes around.
There are other exemptions to your property taxes that might apply to you.
Effective January 1, 2000 the Collier County Board of Commissioners and the Naples City Council approved an additional homestead exemption for certain seniors. Seniors who can provide proof of an annual household income of less than $23,463 are eligible for an exemption of up to $25,000. As with the homestead exemption, the amount of this exemption is subtracted from the taxable value of your home before the property tax is calculated.
Any widow or widower who is a permanent Florida resident may claim the $500 exemption. As with the homestead exemption, the $500 is subtracted from the taxable value of your home before the property tax is calculated.
Charitible Use Property Tax Exemption
Property that is used exclusively or predominantly for charitable, religious, educational, governmental, literary or scientific purposes might be eligible for partial or complete exemption from ad valorem taxation.
Disabled Property Tax Exemption
All homeowners in Florida who use their house as their permanent residence and are either quadriplegic, paraplegic, hemiplegic, or other totally and permanently disabled person, who must use a wheel chair for mobility or are legally blind, are eligible for complete exemption from ad valorem taxation.
In addition, every Florida resident who is totally and permanently disabled qualifies for a $500 exemption. As with the homestead exemption, the $500 is subtracted from the taxable value of your home before the property tax is calculated.
Disabled Veteran Property Tax Exemptions
All homeowners in Florida who use their house as their permanent residence and are a veteran, honorably discharged with a service connected total and permanent disability, are eligible for complete exemption from ad valorem taxation.
Also, any military personnel, whether using their home as a homestead or not, who was disabled at least 10% in war or by service-connected misfortune is entitled to a $5000 exemption. As with the homestead exemption, the $5000 is subtracted from the taxable value of your home before the property tax is calculated.