Blog Article

Ad Valorem vs. Non-Ad Valorem Taxes

Author: PropertyKey

As you know, researching property prospects involves time, effort, and a keen eye on the market to understand your potential property purchase, which also means learning about subsequent costs to maintain thereafter, especially if you're interested in gated communities and specific districts. 

Ad valorem taxes 

Ad valorem is a Latin phrase that means “according to value.” This tax can be applied to vehicles, consumer goods, and most commonly real estate. In other words, ad valorem taxes are based on the value of an item at the time of the transaction or in this case property value. These taxes are typically imposed by local jurisdictions, counties, and school districts and are assessed annually to determine current real estate value. This also provides funding to local and state governments. So if you plan on making renovations after purchasing real estate, this could potentially increase your property value as well as ad valorem taxes down the line. The National Property Tax Group provides deadlines for each state to submit their personal and real estate property taxes that can be found here in addition to when bills are issued. 

Non-ad valorem taxes 

Non-ad valorem taxes are service charges or special assessments that may benefit residents. Examples of non-ad valorem taxes include improvements to landscaping, security, waste disposal, street light renovations, road repairs, and most notably Community Development Districts (CDD). You can spot these taxes on your TRIM and revenue notice, or tax bill.

ad valorem and non-ad valorem taxes in iMapp

Community Development Districts (CDD) 

Community Development Districts are specialized governmental units established that provide long-term and specific needs for its residents to increase the quality of life, maintain community infrastructure, and support growth. Florida, in particular, has nearly 800 active community development districts registered in their system and over 200 community districts in redevelopment. If you’re looking into properties in these types of communities, you will most likely pay higher taxes, but how much you pay on these taxes can vary a great deal. 

 Florida CDDs Established in October 2021

District Name

County

Date Established

Website 

Hawthorne Mill North Community Development District (2021)

Polk

10/4/2021

hawthornemillnorthcdd.net

Scenic Terrace South Community Development District

Polk

10/5/2021

www.scenicterracesouthcdd.com

Silver Oaks Community Development District

St. Lucie

10/13/2021

silveroakscdd.net

Somerset Bay Community Development District

Hernando

10/13/2021

Not on File

Merrick Square Community Development District

Broward

10/20/2021

merricksquarecdd.net

Lake Hideaway Community Development District

Hernando

10/27/2021

Not on File

                     Redeveloped Florida community district in 2021

District Name

County

Date Created

Website 

North Beach Community Redevelopment Agency

Miami-Dade

2/10/2021

www.miamibeachfl.gov/northbeachcra

                        Source: Florida Department of Economic Opportunity 

As you explore iMapp, you can find out whether a property listing is a part of a community development district as well as the previous ad valorem and non-ad valorem taxes paid. You can research all of these districts, what they are doing and how it will affect you as a homeowner. Hopefully, this tool will make it easier for you to make your big decision and avoid surprise tax bills! 

PropertyKey
ABOUT THE AUTHOR

PropertyKey

Our team at PropertyKey puts together articles based on our combined 130+ years of real estate experience to provide useful updates, tips and knowledge to assist business strategy.