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Real Estate Tax Help for Vertical Subdivisions

For many years we have sought to address the problems faced by mixed-use developments where different uses in a single structure are carved up into separate fee simple parcels. The main problem has been the inability to obtain separate tax folio numbers for the separate parcels. This has resulted in a situation where it is either difficult or impossible to finance the separate parcels since they all share one tax folio number and there is only a single tax bill issued for multiple parcels. For reasons not clear, the Tax Assessor’s Office has refused to provide separate tax ID numbers arguing that a separation for tax billing can be achieved by creating a condominium structure. However, anyone knowledgeable in the condominium arena recognizes that using a condominium regime may frequently create more serious problems than the tax issue.

In the 2018 legislative session we were fortunate in having a tax bill that was originally prepared in 2014, and which languished for many years, inserted in the 2018 budget bill and passed as part of the budget bill CS/HB 7087.

The budget bill creates a new Section 193.0237 of Florida Statutes. This Section requires separate tax folio numbers for separate parcels created in a recorded instrument in the same way that separate tax folios are required for condominium units. It instructs the Tax Assessor to allocate the land value of the property to each of the separate parcels in the same proportion as the value that each parcel bears to the total value of all parcels.

The effect of this legislation should further the development of multi-use buildings providing for more interesting and more useful structures in Florida’s emerging major cities.

Related Practices
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