A property owner is now required to notify the Property Appraiser when there has been a change of ownership or control of non homestead real property. This is significant because the Property Appraiser must now be notified in writing of changes in ownership or control even when the change is not evidenced by the recording of a deed. Florida Statutes section 193.1556 defines a change of ownership or control as “any sale, foreclosure, transfer of legal or beneficial title in equity to any person, or the cumulative transfer of control or of more than 50 per cent of the legal entity that owned the property when it was most recently assessed at just value.” Exceptions to the notification rule include 1) a transfer of title to correct an error and 2) a transfer between legal and equitable title. There is also an exception for a transfer between husband and wife in connection with residential non homestead property containing 9 or fewer dwelling units.
The need for this document was triggered by Florida Statutes 193.1554 and 193.1555 which provide tax relief for non homestead residential property and non residential property. The statutes call for nonresidential real property and non homestead residential property to be assessed annually on January 1. Unless an exception applies, the assessed value resulting from such reassessment may not exceed 10% of the property’s assessed value for the prior year. However, on the first day of January following a change or ownership or control, the property shall be assessed at “just value”. Therefore, the 10% limitation would not apply if there had been a recent change in ownership or control, and instead the property would be assessed at just or market value.
The notification will apply to a number of situations that previously were not reportable. For example, a transfer of majority ownership in a corporation owning real property would require notice. In January following the sale of stock the property would be reassessed at full just value without the benefit of the 10% cap. A similar analysis would be applicable to interests in other entities such as partnerships, limited liability companies, and trusts. Example: A vacation home is owned by Mrs. Jones as trustee of her revocable trust. When Mrs. Jones dies, her trust declaration provides that the property remains in trust for the benefit of the grandchildren. This change in equitable ownership should be reported to the Property Appraiser.
If it is determined for any year within the prior 10 year period that a person or entity received the benefit of the 10% cap who was not entitled to receive it, the property appraiser will file a notice of tax lien against any property owned by that person or entity in the county. The property would be subject to the amount of unpaid taxes, a penalty of 50% of the unpaid taxes, and interest at 15% per annum.
The Department of Revenue (“DOR”) has been creating a form for use in giving such notice which is called the “DR-430.” The words of the statute suggest that notice should be given in connection with every change of ownership or control, including deeded conveyances. However, the DOR’s provisional form DR-430 indicates that an owner need not file the document if a deed has been promptly recorded with the county clerk of court documenting the change. The legislation indicates that the notification requirement of the law shall apply to the 2009 tax roll. Therefore, it is presumed that the Department of Revenue will finalize the form and make clear the circumstances under which notice will be required before the end of the year.