What Are Real Estate Taxes?
Real estate taxes refer to the taxes paid by property owners to local governments. These taxes are used to fund public services like schools, fire departments, infrastructure, and parks. They're assessed annually and are usually based on the assessed value of your property.
What Are Property Taxes?
Property taxes are essentially the same as real estate taxes in most contexts. The terms are often used interchangeably by professionals, county assessors, and the general public. However, property taxes can sometimes include taxes on both real property (like homes and land) and personal property (like vehicles or machinery in some states).
The Key Differences (When They Exist)
In most states, including Florida, real estate taxes and property taxes mean the same thing. But in other parts of the country, property taxes may have a broader definition that includes personal property.
In Summary:
Real estate tax = property tax in Florida and most U.S. states
Sometimes "property tax" can include other types of taxable assets
How Real Estate Taxes Are Calculated in Florida
Real estate taxes in Florida are based on the assessed value of your property, which is determined by the local county property appraiser. This assessed value is multiplied by the local millage rate (a tax rate expressed in mills per dollar of assessed value).
Formula:
Assessed Value x Millage Rate = Annual Property Tax Bill
For example, if your home is valued at $500,000 and the millage rate is 1.5%, your annual property tax would be around $7,500.
Can You Deduct Real Estate Taxes?
Yes. As of 2024, homeowners can deduct up to $10,000 of state and local taxes (including property taxes) on their federal income tax return if they itemize deductions.
Tip: Always consult a tax professional for the most accurate and personalized advice.
Why This Matters for Buyers & Investors
Understanding real estate taxes is crucial when calculating your total cost of ownership or investment returns. Taxes can significantly impact your monthly mortgage payments and long-term ROI.
First-time buyer? Factor property taxes into your pre-approval budget.
Investor? Understand how taxes affect your cap rate and net income.
Final Thoughts
Yes, real estate taxes and property taxes are usually the same thing, especially in Florida. But knowing the small distinctions and how these taxes are calculated can help you make smarter buying, selling, or investing decisions.
Ready to learn more?
Check out my full Miami real estate blog at herrera.realtor/blog or reach out directly if you have questions about your property taxes or home search.
Daniel Herrera
Miami Realtor | Residential & Commercial
