News

By Mary Hladky

Taxable values of Palm Beach County properties have surged more than any year since 2006.
That year, countywide taxable values jumped by a whopping 23%. The Great Recession halted the meteoric rise, with the county experiencing significant decreases for four consecutive years beginning in 2008.
They rebounded into positive territory in 2012 and recently have shown steady growth of about 6% a year.
But a white-hot real estate market and a spike in new construction boosted taxable values by double digits countywide and in all but seven municipalities last year.
Revised preliminary numbers issued by Property Appraiser Dorothy Jacks on June 28 show countywide values increased by 15.2%, up from 5.8% the previous year. The numbers are based on market conditions as of Jan. 1, 2022.
All southeast county municipalities saw strong gains, with Manalapan’s 28.2% jump, Ocean Ridge’s 18.3% rise and Boynton Beach’s 16.5% increase outpacing the rest.
Boca Raton’s taxable values rose 14.5%, up from last year’s 3.8%, according to Jacks’ most recent valuations. Delray Beach’s went up 15.4%, an increase from 5.4%; Briny Breezes’ rose by 13.6%, up from 10.4%; Gulf Stream’s by 13%, up from 2.5%; Highland Beach’s by 13.8%, up from 3.5%; Lantana’s by 15.8%, up from 9.3%; and South Palm Beach’s by 12.7%, up from 4.4%.
The soaring valuations will translate into higher property tax bills for homeowners unless the county and municipalities reduce their tax rates, a potential outcome that has raised alarms at a time when inflation and rising interest rates are straining family budgets.
Pedro Garcia, Miami-Dade’s property appraiser, has sent a memo to county commissioners urging elected officials across that county and its School Board to cut the tax rate to provide relief to homeowners, the Miami Herald has reported.
Palm Beach County Mayor Robert Weinroth said county commissioners should consider reducing the tax rate to offset a tax bill increase, according to the Palm Beach Post.
Jacks, in an interview with The Coastal Star, was careful to stay in her lane. “It is not my place to counsel (other elected officials) on anything,” she said.
But Jacks noted that if taxable values rise and the tax rates stay the same, the county and municipalities will collect more revenue.
“If they need the same amount of money (as last year), maybe they can reduce the rate and keep your taxes about the same. If the values go up and rates go up, the taxpayer is not getting a benefit from increased value.”
She then added, “I think tax reduction is a great thing, especially for the folks who are paying taxes.”
Boca Raton officials pride themselves on their city’s low tax rate, which is possible because the city has the strongest tax base in the county.
“I will not vote for a millage increase,” said Mayor Scott Singer. “That is clear.”
Beyond that, Singer said in mid-June that it is too early in the city’s budget and tax-rate-setting process to say what will happen.
Boca, like all cities, is facing rising costs for supplies, equipment and building projects due to price increases and supply chain issues. The growing city also needs to hire more employees to keep service levels high, and to retain existing employees.
“Given the incredible inflationary environment, challenges to get staff, cost of construction materials, cost of gasoline, it is hard to say today what if any decrease in the millage rate we will have,” Singer said.
“Regardless, if there is no millage rate increase … we will continue to have one of the lowest millage rates of any full-service city in Florida.”
Manalapan Town Manager Linda Stumpf attributed her town’s enormous taxable value jump to the construction of new estate homes.
It is welcome news since the additional revenue “gives me a little bit of flexibility” on buying equipment the town needs and increasing staffing, she said.
Contacted on June 22, Stumpf noted that the town’s budget for next fiscal year was not yet finalized and no tax rate had been set.
“I anticipate it will be reduced,” she said. “How much I can’t tell you.”
Ocean Ridge Town Manager Tracey Stevens said her town’s strong taxable value showing is the result of continuing tear-downs and rebuilding of single-family homes and skyrocketing real estate values.
Speaking in mid-June, she said it is too soon to know what will happen with the tax rate, although the Town Commission had instructed her in early June to keep it at last year’s $5.50 for every $1,000 of assessed value.
The additional revenue that rate will bring in would pay for deferred maintenance and capital projects such as stormwater drainage.
The commission’s stance could change though, she said, after public hearings on the budget and tax rate this summer.
While taxable values have increased substantially, they do not fully reflect how much property values have increased as demand exceeds supply.
Homeowners don’t feel the full brunt of rising property values because state law caps the taxable value increase to 3% for homesteaded properties. Non-homesteaded properties are capped at 10%.
Another factor is that many properties such as churches and schools are tax-exempt.
In May, the median sale price of a single-family home in the county rose to a record $615,000, up $14,000 since April and 30% more than one year ago, according to Broward, Palm Beaches and St. Lucie Realtors. The average sale price topped $1 million.
There are signs, however, that the market is cooling off, in part because of increasing interest rates. But since the market has been so strong during the first six months of this year, Jacks anticipates valuation increases next year.
Local governments are reluctant to raise tax rates, a politically problematic step. When taxable values rise, they often reduce the tax rate a bit, but not enough to avoid a tax increase.
To prevent a tax increase altogether, elected officials would have to use the “rolled-back” rate, which state law requires them to calculate. That rate would generate the same amount of property tax revenue as the previous year. But again, officials are always in need of more revenue and rarely do that.
New construction has soared in the county to $4.4 billion, up from last year’s $3.2 billion.
The largest projects added to the tax roll this year in Delray Beach are the Ray Hotel at 223 NE Second Ave. in Pineapple Grove, the Delray Beach Market food hall at 33 SE Third Ave., and the estate home at 707 N. Ocean Blvd., according to the property appraiser’s office.
The largest Boca Raton projects are Aura Boca, a luxury apartment project at 789 W. Yamato Road, a single-family home built in 2021 at 450 E. Coconut Palm Road, and another new home built last year at 1908 Royal Palm Way.
In Boynton Beach, the projects are Quantum Lake Villas West apartments near the intersection of Gateway Boulevard and Quantum Lakes Drive, a single-family home at 634 Windward Circle South in the gated Casa Del Mar community, and a McDonald’s at 1701 S. Congress Ave.
Municipalities and the county will hold public hearings this summer on their new budgets and proposed tax rates. Final action on tax rates typically takes place in September.