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By Mary Hladky

After soaring for two years, taxable values of Palm Beach County properties are now heading back to earth.

Countywide property values increased by 10% — 9.99% to be exact — a very healthy amount but lower than last year’s nearly 14% jump and 2022’s 15.2% increase that were fueled by a hot real estate market and spikes in new construction, according to the July 1 preliminary tax roll released by Property Appraiser Dorothy Jacks.

This marks the 13th year in a row that taxable values have increased in the aftermath of the 2008 Great Recession.

“The overall increase in taxable value has slowed compared to previous years,” Jacks said in announcing her office’s estimates in late May, before the updated calculations were made in June. “Market values for some building types have begun to flatten in Palm Beach County. …”

That includes the residential market, which is “somewhat flat” but not declining, she told county commissioners June 11.

One factor is the 2021 collapse of a Surfside condominium in Miami-Dade County, which resulted in new laws requiring regular inspections to make sure buildings are safe and have adequate financial reserves to pay for maintenance and repairs. The changes forced many condo boards to increase maintenance fees and impose special assessments.

Owners who can’t afford the higher costs are selling at a loss, which will result in a decline in condo values over the next few years, Jacks said.

But condos that already required reserves and conducted regular maintenance will not face this problem, she said.

The overall picture, however, is positive. Total taxable value in Palm Beach County is at $318 billion and the county’s market value now exceeds $500 billion for the first time. New construction added to the tax rolls this year totaled more than $5 billion.

“Five billion is the highest I have seen in my time in office,” Jacks, first elected in 2016, told the commission. “New construction is strong. More apartments are going up everywhere. I don’t see that stopping.”

Of the county’s 39 towns and cities, Boca Raton continues to have the highest taxable value at $37.6 billion, followed by Palm Beach at $32.1 billion.

All southeastern Palm Beach County municipalities saw taxable value increases, although less than the gains of the last two years.

Briny Breezes saw the largest percentage increase at 11.3%, followed by 10.9% in Delray Beach and 10.3% in Ocean Ridge.

South Palm Beach was at 10%, Highland Beach at 9%, Lantana at 8.9%, Boynton Beach at 8.7%, Boca Raton at 8.5%, Gulf Stream at 6.6% and Manalapan at 5.7%.

Briny Breezes Town Manager Bill Thrasher said a couple of new mobile homes were installed last year, “which is significant for Briny,” and called the jump in the town’s taxable value from around $85.5 million to $95.2 million “a material increase.”

South Palm Beach Town Manager Jamie Titcomb noted the town’s increase is right in line with that of the county as a whole.

“Our value increase is really just straight positive growth in valuation of all properties,” he said, adding that the town has not seen much new construction (just $903 according to the preliminary figures).

Manalapan’s modest percentage rate increase reflects the countywide slowdown in taxable value growth, said Assistant Town Manager Eric Marmer.

“The entire housing market has stopped moving at the freight train speed of the past few years,” he said, noting that Manalapan remains “one of the most sought-after places to live in the country.”

Taxable value increases are great news for municipal leaders as they work to finalize their budgets for the fiscal year that begins Oct. 1.

Local governments use taxable values to calculate how much property tax money they can expect at various tax rates. They then set their proposed annual budgets and tax rates.

An increase in taxable value means they will collect more money from property owners even if they keep their tax rates the same as last year.

Unless governments lower their tax rates, homeowners will face higher property tax bills at a time when inflation and rising interest rates are straining family budgets.

To prevent a tax increase entirely, elected officials would have to use the “rolled-back” rate, which state law requires them to calculate and advertise. That rate would generate the same amount of property tax revenue as the previous year — except for the extra revenue coming from new construction.

But municipalities are loath to use that rate, because they all face rising costs. For example, Boca Raton, a rapidly growing city with resident demand for quality services, usually lowers its tax rate by a minuscule amount, which allows city leaders to say they have cut the rate while still benefiting from increased revenue.

Homeowners with homesteaded properties, however, don’t feel the full brunt of rising property values because state law caps their taxable value increase at 3% a year. Non-homesteaded properties are capped at 10% annually.

The taxable value numbers are based on market conditions as of Jan. 1. They will be submitted to the state Department of Revenue. Local governments finalize their tax rates during public hearings in September.