After years of a soft real estate market, new Miami-Dade County figures show that Key Biscayne’s taxable property base increased a modest 0.7 % last year.
When the tax base expands, municipalities can receive more income. The number is important as Village leaders plan the 2021-2022 budget, which will be adopted in September.
The increase is below the county average of 3.6%, the Miami-Dade County Property Appraiser’s office reported. Key Biscayne’s taxable value rose to $8.241 billion, up about $60 million from the year before.
About two-thirds of the tax base increase is attributable to rising values; only $22 million comes from new construction.
Taxable property values in Key Biscayne had declined for three prior years, setting the stage for contentious tax debates in the Village Council — sometimes because of public confusion over tax terminology.
Municipal taxation revolves around the “millage rate,” or the amount of tax collected per dollar of assessed value. Because of this, even keeping the millage rate unchanged from year to year can lead to either a tax increase or a decrease — depending on whether the tax base expands or contracts. Moreover, the taxable value is heavily influenced by exemptions and caps, which vary widely from property to property
The Village’s chief financial officer, Benjamin Nussbaum, said if the millage rate from last year were kept the same, the new figure would add just $193,000 in revenue. Nussbaum said based on historical trends, the final number may inch up closer to a full percent when the property appraiser updates the calculations in July.
Mayor Mike Davey said given recent real estate activity, he’d been hoping for a larger increase in the tax base.
“I was surprised it was this low. But we have to take into account that COVID was going on for 10 months of the year” he said. “We had three years of contractions. It’s a positive step and I think we will continue on that trajectory.”
Property Appraiser Pedro Garcia said the pandemic caused declines in commercial property values and condominiums.
On the positive side, he said Key Biscayne benefited from strong single-family home sales, particularly waterfront properties. He said he expects that 2022 will show higher new construction numbers as older homes are torn down and replaced with new construction