Non-Homestead Assessment Cap
En español: Tope de avalúo para no residencia principal (non-homestead cap)
Florida limits how fast the assessed value of non-homestead property can rise: no more than ten percent a year, regardless of what the market does. The cap protects a long-term owner from tax increases the market would otherwise impose, and it resets to full market value when the property changes hands.
- It is the single most common overstatement of NOI in a Florida offering package, and it is not usually dishonest. It is just the seller's real bill.
- The reset follows the change of ownership, so it lands on the buyer's first full year, not gradually.
- The cap does not cover every levy, and the exact treatment sits with the county property appraiser.
- Estimate the reset from the purchase price and the current millage, then confirm it with the appraiser's office before it becomes a surprise.
The same building, assumed assessed at $900,000 under the cap, sold at $1,599,500, taxed at roughly 2% of value.
Fourteen thousand a year of NOI the seller never had to earn. Underwrite the buyer's tax bill, never the one on the operating statement.
Related terms
All termsTRIM Notice
The TRIM notice, for Truth in Millage, is the statement every Florida property owner receives in August showing the property appraiser's value, the exemptions applied, the rates each taxing authority proposes, and what the tax bill will be if those rates are adopted.
OwnershipVAB Appeal
A VAB appeal is a petition to the county Value Adjustment Board contesting the property appraiser's value, a denied exemption, or a classification.
InvestmentOperating Expense Ratio
The operating expense ratio is total operating expenses divided by effective gross income, expressed as a percentage.
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