Tax Proration Agreement Florida

Hello. I`m Chip Waller. I am a board certified real estate lawyer and have completed approximately 15,000 real estate transactions in my 38-year career. I am often asked, in the context of the conclusion, what do you mean by fiscal prolization? The problem caused by the Save Our Homes Cap and the maximum annual increase is that sellers of real estate who have owned their property over a long period of time have an estimated taxable value drastically lower than the market value of the property. When selling, probably at market value or around market value, the real estate expert revalues the property at 80% – 90% of the sale price. This results in a pro rata tax credit, granted at closing, drastically lower than the entire tax bill that the buyer must pay at the end of the year. The joint committee of the Florida Bar and the Florida Association of Realtors (“FAR-BAR”) developed the concept of “tax prolation” as a solution to this dilemma. The “tax rebate” clause is included in the residual AS IS contract for the sale and purchase of FAR-BAR in paragraph 18 (K) and provides that “any tax transaction based on an estimate shall be adjusted at the request of one of the parties after receipt of the tax accounts for the current financial year. This STANDARD K will survive the closure. This provision allows any party to a real estate transaction to request a revaluation of annual taxes. Hi John, thank you for the question. We`re sorry this article doesn`t offer exactly what you were looking for. The answer to your question about the rights of the parties to reconsider the prorations depends on your contract. Most standard contracts used in Florida have provisions that cover prorations.

For example, the FloridaRealtors/FloridaBar-5 (Rev. 4/17) treated (widely spread throughout the state) prorations in its K standard. The following language of this paragraph would apply to your situation: “If taxation for the current year is not available, taxes will be levied in proportion to the tax of the previous year. A deduction based on an estimate is readjusted at the request of one of the parties upon receipt of the tax account for the current financial year. As you closed in October, it is unlikely that there was an evaluation for the current year (2017) that you can count on. They could therefore have used the amount of the previous year. As would have been an estimate, this contract gives each party the right to demand a readjustment. If you have used this agreement and the facts are stated, buyers will likely have the right to demand a new adjustment.