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After hurricane, a deluge of taxes?
John Wolbert's rebuilt home could be taxed at prestorm value. Or not.
By PAUL SWIDER
Published March 26, 2006
MADEIRA BEACH - Save Our Homes is either bane or boon, but for some property owners, it can be both.
John Wolbert, a Madeira Beach city commissioner, had lived in his Lillian Drive home since 1990, when he bought it for $170,000.
"I think I overpaid," Wolbert joked about the home he said was originally built in 1969 for $25,000, including the land.
He did some remodeling to increase the value by about $100,000, but still paid relatively modest taxes because he had a homestead exemption and the property's value was capped.
In 2004, the Pinellas County Property Appraiser's Office put the market value of Wolbert's home at $456,000, though it would surely have brought more, he said. Still, he paid only $3,607 in taxes for a 1,824-square-foot home on a south-facing waterfront lot with a deep-water dock just minutes from John's Pass.
Hurricane Frances blew in that year. Water sparked a mold problem impossible to eliminate, he said. The simplest solution was to tear down the home and rebuild, but doing so would reset the clock on his tax cap and increase his property taxes. When Wolbert's home is finished this year, he expects his taxes to quadruple.
"Being a public official, like it or lump it, I have to take it, but that's a killer," he said of an anticipated tax bill of perhaps $14,000. "The only thing that saves me is that the lot is capped."
Wolbert does retain a homestead exemption on his lot while he's rebuilding, so he won't face the tax crunch of a new buyer. But he's paying taxes on that lot, $2,901 on property valued vacant at $415,000, and he's paying on another home he bought to live in during construction.
Wolbert bought his other home at the end of 2004, a 1,980-square-footer with three bedrooms and two baths on 80th Avenue in unincorporated Pinellas County near Seminole. He paid $240,000 for that home, also built in 1969, and his most recent taxes were $3,884, based on a county valuation of $172,400. Wolbert has no cap or exemption on the home because he has a cap on the one he is rebuilding.
"I am totally in favor of portability of a homestead," Wolbert said. The state Legislature is considering allowing people to carry their exemptions and caps with them so they don't face the kind of crunch Wolbert expects.
But the Legislature also took account of storm circumstances, so Wolbert may yet enjoy the rewards of Save Our Homes. With storm damage a growing fear, Wolbert's case may be instructive for many.
The rule had been that a storm-damaged home could be rebuilt to 125 percent of its value and retain its Save Our Homes status, said Pam Dubov, chief deputy to Pinellas Property Appraiser Jim Smith.
Recognizing that rebuilding the many older homes damaged in 2004 would surely exceed 125 percent of their value, the state changed the rule for homes damaged by named storms in that one year to allow rebuilding within 110 percent of the original square footage, not value.
The first 110 percent of size would be valued like the old capped home. Anything over that square footage would be added at market value, and a homeowner's tax cap would be reset at the new value. For Wolbert, that could mean a new $750,000 home could be taxed at its prestorm value.
Wolbert's new home will have 4,500 square feet. How the 110 percent gets calculated may not fall straight from that number, Dubov said, because the property appraiser usually pro-rates gross square footage, including garages, porches and partly finished areas, depending on use and cost to build.
Wolbert's old home had a gross square footage of 2,870. Until his new home is built and appraised, Dubov said she can't speculate on the comparison. She also said her office has yet to handle a storm case like this, so she is unsure what the policy will be.
The purpose behind the shift at the state level was to spare homeowners merely trying to rebuild after a storm, but also not allow them to benefit unduly while constructing a palace.
Dubov said she is unsure if the state will make that shift permanent for all storm damage or whether it will apply only to 2004.
Paul Swider can be reached at 892-2271 or pswider@sptimes.com or by participating in itsyourtimes.com.
[Last modified March 25, 2006, 09:39:03]
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