12D-8.0061: Assessments; Homestead Property Assessments at Just Value
12D-8.0065: Transfer of Assessment Limitation Difference; Portability; Denials and Late Applications
12D-8.00659: Notice of Change of Ownership or Control of Non-Homestead Property.
12D-8.022: Reporting of Fiscal Data by Fiscally Constrained Counties to the Department of Revenue
PURPOSE AND EFFECT: The purpose of the amendment to subsection 12D-8.0061(2), F.A.C., is to implement the provisions of Chapter 2010-109, Laws of Florida, to implement the additional criteria that apply to a change of ownership in Section 193.155, Florida Statutes. The purpose of proposed Rule 12D-8.0065, F.A.C., is to implement the provisions of Chapter 2008-173, L.O.F., replacing Emergency Rules 12DER11-03 and 12DER11-06. This proposed rule implements the procedures for the transfer of homestead assessment limitation difference (portability), provides necessary forms to apply for portability and provides instructions the property appraisers. The purpose of proposed Rule 12D-8.0659, F.A.C., is to implement the provisions of Chapters 2008-173 and 2010-109, L.O.F., that created ss. 193.1554, 193.1555, and 193.1556, F.S. The proposed rule implements instructions to property owners for the procedures and criteria to inform the property appraiser about any change of ownership or control for non-homestead real property. The purpose of proposed Rule 12D-8.022, F.A.C., is to implement the provisions of Chapter 2008-173, L.O.F., replacing Emergency Rule 12DER11-09. This proposed rule implements Section 218.12, F.S., with procedures for fiscally constrained counties to apply for the funds to offset reductions in ad valorem tax revenue.
SUMMARY: The amendment of Rule 12D-8.0061, F.A.C., implements the additional criteria that apply to a change of ownership in Section 193.155, Florida Statutes. The proposed Rule 12D-8.0065, F.A.C., implements the procedures for the transfer of homestead assessment limitation difference (portability), provides necessary forms to apply for portability and provides instructions to the property appraisers. Creation of Rule 12D-8.00659, F.A.C., implements instructions to property owners for the procedures and criteria to inform the property appraiser about any change of ownership or control for non-homestead real property. Creation of Rule 12D-8.022, F.A.C., creates a report to be completed by fiscally constrained counties to apply for the funds distributed by the legislature.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and 2) based on past experiences with activities for providing the public tax information and rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 195.027(1), 213.06(1) FS.
LAW IMPLEMENTED: 192.047, 193.011, 193.023, 193.114, 193.1142, 193.155, 193.1554, 193.1555, 193.1556, 193.461, 193.703, 194.011, 200.065, 213.05, 218.12, 218.125, 218.67 FS.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: May 1, 2012, 10:00 a.m.
PLACE: Conference Room 1220, Building 2, Capital Circle Office Complex, 2450 Shumard Oak Blvd., Tallahassee Florida. The public can also participate in this hearing through a simultaneous electronic broadcast of this event by the Department of Revenue using WebEx and conference calling technology from their home or office. The requirements to participate are access to the Internet and a telephone. Specific information about how to participate in this electronic meeting will be included in the Agenda for this hearing posted on the Department’s site at: http://dor.myflorida.com/dor/property/legislation.
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Janice Forrester, Tax Law Specialist, telephone (850) 617-8886 or email ForrestJ@dor.state.fl.us. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Janice Forrester, Tax Law Specialist, telephone (850)617-8886 or email ForrestJ@dor.state.fl.us
THE FULL TEXT OF THE PROPOSED RULE IS:
12D-8.0061 Assessments; Homestead Property Assessments at Just Value.
(1) No change.
(2) Real property shall be assessed at just value as of January 1 of the year following any change of ownership. If the change of ownership occurs on January 1, subsection (1) shall apply. For purposes of this section, a change of ownership includes any transfer of homestead property receiving the exemption, but does not include any of the following:
(a) Any transfer in which the person who receives homestead exemption is the same person who was entitled to receive homestead exemption on that property before the transfer, and
1. No change.
2. The transfer is between legal and equitable title or equitable and equitable title and no other person applies for a homestead exemption on the property; or
3. No change.
(b) through (c) No change.
(d) The transfer occurs by operation of law to the surviving spouse or minor child or children under Section section 732.401 732.4015, F.S. Florida Statutes.
(3) A leasehold interest that qualifies for the homestead exemption under Sections 196.031 or 196.041, F.S., shall be treated as an equitable interest in the property for purposes of subsection (2).
Rulemaking Specific Authority 195.027(1), 213.06(1) FS. Law Implemented 193.011, 193.023, 193.155, 213.05 FS. History–New 12-27-94, Amended 10-2-07,________.
12D-8.0065 Transfer of Homestead Assessment Difference; “Portability”; Sworn Statement Required; Denials; Late Applications.
(1) For purposes of this rule, the following definitions apply.
(a) “The previous property appraiser” means the property appraiser in the county where the taxpayer’s previous homestead property was located.
(b) “The new property appraiser” means the property appraiser in county where the taxpayer’s new homestead is located.
(c) “The previous homestead” means the homestead which the assessment difference is being transferred from.
(d) “The new homestead” means the homestead which the assessment difference is being transferred to.
(e) “Assessment difference” means the difference between assessed value and just value attributable to Section 193.155, F.S.
(2) Section 193.155(8), F.S., provides the procedures for the transfer of the homestead assessment difference, within stated limits, when a homestead is abandoned. This rule describes those procedures, which are an alternative to assessment at just value. The amount of the assessment difference is transferred as a reduction to the just value of the interest owned by taxpayers that qualify and receive homestead exemption on a new homestead.
(a) This rule sets limits and requirements consistent with Section 193.155(8), F.S. A taxpayer may apply for the transfer of an assessment difference from a previous homestead property to a new homestead property if:
1. The taxpayer received a homestead exemption on the previous property on January 1 of one of the last two years before establishing the new homestead; and,
2. The previous property was abandoned as a homestead after that January 1; and,
3. The previous property was, or will be, reassessed at just value or assessed under Section 193.155(8), F.S., as of January 1 of the year after the year in which the abandonment occurred subject to Sections 193.155(8) and 193.155(3), F.S; and
4. The taxpayer establishes a new homestead on the property by January 1 of the year they are applying for the transfer.
(b) Under Section 193.155(8), F.S., the transfer is only available from a prior homestead for which a taxpayer previously received a homestead exemption. For these rules:
1. If a husband and wife owned and resided on a previous homestead, each is considered to have received the homestead exemption, even if only one of them applied.
2. For joint tenants with rights of survivorship and for tenants in common, those who applied for, received the exemption, and resided on a previous homestead are considered to have received the exemption.
(3) To apply for portability, the taxpayer must file Form DR-501T, Transfer of Homestead Assessment Difference, (incorporated by reference in Rule 12D-16.002, F.A.C.), including a sworn statement, by March 1. Form DR-501T is submitted as an attachment to Form DR-501, Original Application for Ad Valorem Tax Exemption, (incorporated by reference in Rule 12D-16.002, F.A.C.).
(4) Within the limitations for multiple owners in subsection (5), the total which may be transferred is limited as follows:
(a) Upsizing – When the just value of the new homestead equals or is greater than the just value of the previous homestead, the maximum amount that can be transferred is $500,000.
(b) Downsizing - When the just value of the new homestead is less than the just value of the previous homestead, the maximum amount that can be transferred is $500,000. Within that limit, the amount must be the same proportion of the new homestead’s just value as the proportion of the assessment difference was of the previous homestead’s just value.
(5)(a) Transferring without splitting or joining – When two or more persons jointly abandon a single homestead and jointly establish a new homestead, the provisions for splitting and joining below do not apply if no additional taxpayers are part of either homestead. The maximum amount that can be transferred is $500,000.
(b) Splitting – When two or more people who previously shared a homestead abandon that homestead and establish separate homesteads, the maximum total amount that can be transferred is $500,000. Within that limit, each taxpayer who received a homestead exemption and is eligible to transfer an amount is limited to a share of the previous homestead’s difference between assessed value and just value.
1. For tenants in common, this share is the difference between just value and assessed value for the tenant’s proportionate interest in the property. This is the just value of the taxpayer’s interest minus the assessed value of the taxpayer’s interest.
2. For joint tenancy with right of survivorship and for a husband and wife, the share is the assessed value of the homestead portion of the property, divided by the number of owners that received the exemption, unless another interest share is on the title. In that case, the portion of the amount that may be transferred is the difference between just value and assessed value for the stated share.
3. The shares of the assessment difference cannot be sold, transferred, or pledged to any taxpayer. For example, if a husband and wife divorce and both abandon the homestead, they each take their share of the assessment difference with them. The property appraiser cannot accept a stipulation otherwise. The shares of the taxpayers that received the homestead exemption cannot total more than 100 percent.
(c) Joining – When two or more people, some of whom previously owned separate homesteads and received a homestead exemption, join together to qualify for a new homestead, the maximum amount that can be transferred is $500,000. Within that limit, the amount that can be transferred is limited to the highest difference between assessed value and just value from any of the taxpayers’ former homesteads.
(6) Abandonment.
(a) To transfer an assessment difference, a homestead owner must abandon the homestead before January 1 of the year the new application is made. To do this, the taxpayer must notify the property appraiser in writing by the time he or she applies for the new homestead exemption. To transfer the assessment difference, the previous homestead must be reassessed at just value as of January 1, subject to Sections 193.155(8) and 193.1553, F.S., which provide for assessment at other than just value.
(b) In the case of joint tenants with right of survivorship, if only one owner moved and the other stayed in the original homestead, the homestead would not be abandoned. The one who moved could not transfer any assessment difference.
(c) To receive an assessment reduction under Section 193.155(8), F.S., a taxpayer may abandon his or her homestead even though it remains his or her primary residence by providing written notification to the property appraiser of the county where the homestead is located. This notification must be delivered before or at the same time as the timely filing of a new application for homestead exemption on the property. This abandonment will result in reassessment at just value as provided in subparagraph (2)(a)3. of this rule.
(7) Only the difference between assessed value and just value attributable to Section 193.155, F.S., can be transferred.
(a) If a property has both the homestead exemption and an agricultural classification, a taxpayer cannot transfer the difference that results from an agricultural classification.
(b) If a homeowner has a homestead and is receiving a reduction in assessment for living quarters for parents or grandparents under Section 193.703, F.S., the reduction is not included in the transfer. When calculating the amount to be transferred, the amount of that reduction must be added back into the assessed value before calculating the difference.
(8) Procedures for property appraiser:
(a) If the previous homestead was in a different county than the new homestead, the new property appraiser must transmit a copy of the completed Form DR-501T with a completed Form DR-501 to the previous property appraiser. If the previous homesteads of taxpayers applying for transfer were in more than one county, each taxpayer from a different county must fill out a separate Form DR-501T.
1. The previous property appraiser must complete Form DR-501RVSH, Certificate for Transfer of Homestead Assessment Difference (incorporated by reference in Rule 12D-16.002, F.A.C.). By April 1 or within two weeks after receiving Form DR-501T, whichever is later, the previous property appraiser must send this form to the new property appraiser. As part of the information returned on Form DR-501RVSH, the previous property appraiser must certify that the amount transferred is part of a previous homestead that has been or will be reassessed at just value as of January 1 of the year after the year in which the abandonment occurred as described in subparagraph (2)(a)3. of this rule.
2. Based on the information provided on Form DR-501RVSH from the previous property appraiser, the new property appraiser calculates the amount that may be transferred and applies this amount to the January 1 assessment of the new homestead for the year applied for.
(b) If the transfer is from the same county as the new homestead, the property appraiser retains Form DR-501T. Form DR-501RVSH is not required. For a taxpayer that applied on time for the transfer of assessment difference, the property appraiser updates the ownership share information using the share methodology in this rule.
(c) The new property appraiser must record the following in the assessment roll submitted to the Department according to Section 193.1142, F.S., for the year the transfer is made to the homestead parcel:
1. Flag for current year assessment difference transfer;
2. Number of owners among whom the previous assessment difference was split. Enter 1 if previous difference was not split;
3. Assessment difference value transferred;
4. County number of previous homestead;
5. Parcel ID of previous homestead;
6. Year from which assessment difference value was transferred;
(d) Property appraisers that have information sharing agreements with the Department are authorized to share confidential tax information with each other under Section 195.084, F.S., including social security numbers and linked information on Forms DR-501, DR-501T, and DR-501RVSH.
(9) The transfer of an assessment difference is not final until all values on the assessment roll on which the transfer is based are final. If the values are final after the procedures in these rules are exercised, the property appraiser(s) must make appropriate corrections and send a corrected assessment notice. Any values that are in administrative or judicial review must be noticed to the tribunal or court for accelerated hearing and resolution so that the intent of Section 193.155(8), F.S., may be fulfilled. This rule does not authorize the consideration or adjustment of the just, assessed, or taxable value of the previous homestead property.
(10) Additional provisions.
(a) If the information from the previous property appraiser is provided after the procedures in this section are exercised, the new property appraiser must make appropriate corrections and send a corrected assessment notice.
(b) The new property appraiser must promptly notify a taxpayer if the information received or available is insufficient to identify the previous homestead and the transferable amount. This notice must be sent by July 1.
(c) If the previous property appraiser supplies enough information to the new property appraiser, the information is considered timely if provided in time to include it on the notice of proposed property taxes sent under Sections 194.011 and 200.065(1), F.S.
(d) If the new property appraiser has not received enough information to identify the previous homestead and the transferable amount in time to include it on the notice of proposed property taxes, the taxpayer may file a petition with the value adjustment board in the county of the new homestead.
(11) Denials.
(a) If the taxpayer is not qualified for transfer of any assessment difference, the new property appraiser shall send Form DR-490PORT, Notice of Denial of Transfer of Homestead Assessment Difference, (incorporated by reference in Rule 12D-16.002, F.A.C.) to the taxpayer by July 1 and include the reasons for the denial.
(b) Any property appraiser who sent a notice of denial by July 1 because he or she did not receive sufficient information to identify the previous homestead and the amount which is transferable, may grant the transfer after receiving information from the previous property appraiser showing the taxpayer was qualified. If a petition was filed based on a timely application for the transfer of an assessment difference, the value adjustment board shall refund the taxpayer the $15.
(c) Petitions of denials may be filed with the value adjustment board as provided in Rule 12D-9.028, F.A.C.
(12) Late applications.
(a) Any taxpayer qualified to have property assessed under Section 193.155(8), F.S., who fails to file for a new homestead on time in the first year following eligibility may file in a subsequent year. The assessment reduction shall be applied to assessed value in the year the transfer is first approved. A refund may not be given for previous years.
(b) Any taxpayer who is qualified to have his or her property assessed under Section 193.155(8), F.S., who fails to file an application by March 1, may file an application for assessment under that subsection and, under Section 194.011(3), F.S., may file a petition with the value adjustment board requesting the assessment be granted. The petition may be filed at any time during the taxable year by the 25th day following the mailing of the notice by the property appraiser as provided in Section 194.011(1), F.S. In spite of Section 194.013, F.S., the taxpayer must pay a nonrefundable fee of $15 when filing the petition. After reviewing the petition, the property appraiser or the value adjustment board may grant the assessment under Section 193.155(8), F.S., if the property appraiser or value adjustment board find the taxpayer is qualified and demonstrates particular extenuating circumstances to warrant granting the assessment.
Rulemaking Authority 195.027(1), 213.06(1) FS. Law Implemented 192.047, 193.114, 193.1142, 193.155, 193.461, 193.703, 194.011 FS. History–New_________.
12D-8.00659 Notice of Change of Ownership or Control of Non-Homestead Property.
(1) Any person or entity that owns non-homestead property that is entitled to receive the 10 percent assessment increase limitation under Section 193.1554 or 193.1555, F.S., must notify the property appraiser of the county where the property is located of any change of ownership or control as defined in Sections 193.1554(5) and 193.1555(5), F.S. This notification is not required if a deed or other instrument of title has been recorded in the county where the parcel is located.
(2) As provided in Sections 193.1554(5) and 193.1555(5), F.S., a change of ownership or control means any sale, foreclosure, transfer of legal title or beneficial title in equity to any person, or the cumulative transfer of control or of more than fifty (50) percent of the ownership of the legal entity that owned the property when it was most recently assessed at just value.
(3) For purposes of a transfer of control, “controlling ownership rights” means voting capital stock or other ownership interest that legally carries voting rights or the right to participate in management and control of the legal entity’s activities. The term also includes an ownership interest in property owned by a limited liability company or limited partnership that is treated as owned by its sole member or sole general partner.
(4)(a) A cumulative transfer of control of the legal entity that owns the property happens when any of the following occur:
1. The ownership of the controlling ownership rights changes and either:
a. A shareholder or other owner that did not own more than fifty (50) percent of the controlling ownership rights becomes an owner of more than fifty (50) percent of the controlling ownership rights; or
b. A shareholder or other owner that owned more than fifty (50) percent of the controlling ownership rights becomes an owner of less than fifty (50) percent of the controlling ownership rights.
2.a. There is a change of all general partners; or
b. Among all general partners the ownership of the controlling ownership rights changes as described in subparagraph 1. above.
(b) If the articles of incorporation and bylaws or other governing organizational documents of a legal entity require a two-thirds majority or other supermajority vote of the voting shareholders or other owners to approve a decision, the supermajority shall be used instead of the fifty (50) percent for purposes of paragraph (a) above.
(5)There is no change of ownership if:
(a) The transfer of title is to correct an error;
(b) The transfer is between legal and equitable title; or
(c) For "non-homestead residential property" as defined in Section 193.1554(1), F.S., the transfer is between husband and wife, including a transfer to a surviving spouse or a transfer due to a dissolution of marriage. This paragraph does not apply to non-residential property that is subject to Section 193.1555, F.S.
(6) For a publicly traded company, there is no change of ownership or control if the cumulative transfer of more than 50 percent of the ownership of the entity that owns the property occurs through the buying and selling of shares of the company on a public exchange. This exception does not apply to a transfer made through a merger with or an acquisition by another company, including an acquisition by acquiring outstanding shares of the company.
(7)(a) For changes of ownership or control, as referenced in subsection (2) of this rule, the owner must complete and send Form DR-430, Change of Ownership or Control, Non-Homestead Property, to the property appraiser unless a deed or other instrument of title has been recorded in the county where the parcel is located. This form is adopted by the Department of Revenue and incorporated by reference in Rule 12D-16.002, F.A.C. If one owner completes and sends a Form DR-430 to the property appraiser, another owner is not required to send an additional Form DR-430.
(b) Form DR-430M, Change of Ownership or Control, Multiple Parcels, (incorporated by reference in Rule 12D-16.002, F.A.C.) may be used as an attachment to Form DR-430. A property owner may use DR-430M to list all property owned or controlled in the state for which a change of ownership or control has occurred. A copy of the form should be sent to each county property appraiser where a parcel is located. This form is adopted by the Department of Revenue and incorporated by reference in Rule 12D-16.002, F.A.C.
(c) On January 1, property assessed under Sections 193.1554 and 193.1555, F.S., must be assessed at just value if the property has had a change of ownership or control since the January 1 when the property was most recently assessed at just value.
(d) The property appraiser is required to record a tax lien on any property owned by a person or entity that was granted, but not entitled to, the property assessment limitation under Section 193.1554 or 193.1555, F.S.
(e) The property appraiser shall use the information provided on the Form DR-430 to assess property as provided in Sections 193.1554, 193.1555, and 193.1556, F.S. For listing ownership on the assessment rolls, the property appraiser must not use Form DR-430 as a substitute for a deed or other instrument of title in the public records.
Rulemaking Authority 195.027(1), 213.06(1) FS. Law Implemented 193.1554, 193.1555, 193.1556 FS. History–New_________.
12D-8.022 Reporting of Fiscal Data by Fiscally Constrained Counties to the Department of Revenue.
(1) This rule applies to counties that meet the fiscally constrained definition in Section 218.67(1), F.S. Under Sections 218.12 and 218.125, F.S., these counties are required to apply for a distribution of funds appropriated by the Legislature for each of the following purposes:
(a) Offsetting reductions in property tax revenues occurring as a direct result of the implementation of revisions to Article VII, Florida Constitution approved in the special election held on January 29, 2008. These reductions include the additional $25,000 homestead exemption, the $25,000 tangible personal property exemption, homestead assessment difference transferability, and the 10 percent assessment increase limitation on nonhomestead property.
(b) Offsetting reductions in property tax revenues occurring as a direct result of the implementation of revisions to ss. 3(f) and 4(b) of Art. VII, Florida Constitution, approved in the general election held in November 2008. These reductions include the exemption for real property dedicated in perpetuity for conservation purposes and classified use assessments for land used for conservation purposes.
(2) An application must be filed with the Department of Revenue on Form DR-420FC, incorporated by reference in Rule 12D-16.002, F.A.C.
(3) Each fiscally constrained county must provide the completed form to the Department of Revenue by November 15 each year. The form must be prepared by the county property appraiser. The following is a summary of the information required on the form:
(a) An estimate of the reduction in taxable value for all county government taxing jurisdictions directly attributable to revisions to Article VII, Florida Constitution approved in the special election held on January 29, 2008. This estimate must be based on values comparable to those certified on Form DR-420, incorporated by reference in Rule 12D-16.002, F.A.C.;
(b) An estimate of the reduction in taxable value for all county government taxing jurisdictions directly attributable to revisions to ss. 3(f) and 4(b) of Art. VII, Florida Constitution, approved in the general election held in November 2008. This estimate must be based on values comparable to those certified on Form DR-420;
(c) Millage rates for all county government taxing jurisdictions as included on the tax roll extended according to Section 193.122, F.S., for all these jurisdictions for both the current and prior year;
(d) Rolled-back rates, if available, for each jurisdiction determined as provided in Section 200.065, F.S., and included on Form DR-420 by each taxing jurisdiction;
(e) Maximum millage rates, if available, for each jurisdiction that could have been levied by a majority vote as included on Form DR-420MM, Maximum Millage Levy Calculation – Final Disclosure, by each taxing jurisdiction. Form DR-420MM is incorporated by reference in Rule 12D-16.002, F.A.C.
(4) The calculation of each distribution of appropriated funds must include both operating and debt service levies, including millages levied for two years or less under Section 9(b), Article VII, Florida Constitution.
Rulemaking Authority 195.027(1), 213.06(1) FS. Law Implemented 200.065, 218.12, 218.125, 218.67 FS. History–New__________.