Forced by insurance to replace roofs, Sarasota homeowners can expect higher tax bills, too

Florida homeowners have increasingly been forced by insurance companies to replace their roofs under threat of huge spikes in premiums — that is, if they can get coverage at all.

At the same time, in Sarasota County, unlike other nearby jurisdictions, that new roof carries another cost: a higher tax bill. Other area counties' elected property appraisers consider replacing a roof with the same material to be a maintenance issue, but Sarasota County's Property Appraiser classifies it as a capital improvement that enhances the home's taxable value.

Sometimes that increased value is greater than 3% on homesteaded property, which one local attorney says "skirts the spirit" of the Florida Constitution that caps the annual increase in taxable value on homestead property at that level annually.

The increase in taxable value is just one of the hits that property owners face after inflation approached a 40-year high last year, the state's property insurance market has been skyrocketing in cost, forcing homeowners to pay for improvements such as roofs just to retain coverage and escalating property values that have driven up taxes.

The local property appraiser says his hands are tied because of state law.

"Our attorney has told us how to interpret the statute and we pride ourselves in following the law," Sarasota County Property Appraiser Bill Furst said. "When the law says the property appraiser may, we always go to the side of the taxpayer. In this case, it says shall and that really, the word shall, doesn’t give me any leeway."

A survey of the property appraisers' offices in Charlotte, Manatee, DeSoto, Hillsborough and Pinellas counties shows the Sarasota office is an outlier in determining that equates a roof replacement with enhancements such as adding a pool or a room to a home.

This isn't the first time Sarasota County's property appraiser's interpretation of state law has been under scrutiny. Furst has taken two cases to the Florida Supreme Court seeking to enforce the letter of the law.

Furst, initially elected in 2008, has shown a willingness to go the distance when legal challenges or issues arise regarding tax assessments and exemptions.

He won a decision at the Florida Supreme Court this year resulting from a 2014 case that involved a rented room at a homesteaded property; the court ruled Furst correctly applied state law by severing the homestead exemption on the property for the portion the owner rented to a long-time tenant.

He lost the previous battle before state's highest court when a clerical error resulted in a significantly reduced tax assessment for a waterfront property and he sought to collect the full amount after the bill had already been paid.

Furst had also challenged Marie Selby Botanical Gardens' tax exempt status on the grounds that a business venture with Michael's on East no longer qualified the nonprofit for a full property tax exemption. A magistrate in 2021 ruled that most of the land on the 15-acre bayfront campus would remain exempt, although some of the property is now taxed.

Local property appraisers interpret state law differently

Florida has 67 property appraiser's offices — one for each county in the state — led by an elected property appraiser. Each year each county's appraiser must assess each land parcel to determine the market value of all property in their jurisdiction.

How they interpret the statues and preform the required duties of their office varies from county to county, said Patrick Alesandri, a career property appraiser and the chief information officer with the Hillsborough County Property Appraiser's Office.

For example, in Hillsborough County, as long as a homeowner does not "improve" the materials of the roof, such as replacing shingles with a tile or metal roof, the new roof will not result in an increase in the property's taxable value.

The statue at issue says: "Changes, additions, or improvements to homesteaded property shall be assessed at just value as of the first January 1 after the changes, additions, or improvements are substantially completed."

Sarasota County views a roof replacement as a change while Hillsborough County views it as maintenance.

“For us, it’s kind of a wash,” Alesandri said said of the valuation. “We didn’t take you down when it was bad, and we’re not going to take it up when you replace it.”

Hillsborough, as well as Manatee, Charlotte, Pinellas and Desoto counties will raise a property's taxable value if the homeowner upgrades the roofing material. That would result in a sizable increase in a property's just value, which would also increase the taxable value by tens of thousands of dollars — and also likely increase the yearly tax bill by hundreds of dollars.

Why it matters

Sarasota attorney Michael Belle only recently discovered how Sarasota County's interpretation raises the assessed value after a client noticed an increase greater than 3% on their tax bill.

It took a bit of investigating, but eventually, the firm pinned the increase in the property's taxable value after a tile-to-tile roof replacement, which resulted in the property tax bill rising by a couple of hundred dollars.

"I was outraged," he said. "If this is not a violation of Save Our Homes, it at least goes against the spirit of it."

Florida residents voted to pass a constitutional amendment about 30 years ago to combat rapidly rising home values. The Save Our Homes amendment provides Florida homeowners with some of the strongest homestead protections in the country, including a cap on the annual increase in taxable value at 3% — no matter how much market values have increased.

While Florida property owners saw their home's market values shoot up 30% to 40% in 2022, taxable values remained much lower because of the cap.

This saves many Florida homeowners thousands of dollars per year as the gap between market value and taxable value grows.

But capital improvements — like adding a room, pool or even a remodel to a home — can be tacked on top of the 3% yearly increase at full market value.

Belle compared replacing a roof to other home maintenance repairs, such as fixing leaky plumbing or repaving a driveway. He has not heard of any other county in Florida that views replacing a roof with the same materials as anything other than maintenance.

He said the result is that any Sarasota resident who replaced a roof saw an increase in the taxes that they shouldn't have, and that if the Property Appraiser's Office views roof replacement as a reason to increase the taxable value cap, then it should also depreciate the roof separately from the home each year.

He said that the policy has likely gone unchallenged because it's only a couple hundred dollars for a $20,000 increase in taxable value — or about the average cost to replace a shingle roof on a single-family home in North Port in 2023.

Challenging the increase in taxable value at a value adjustment board would easily run more than the increase in the tax bill that resulted from the bump in taxable value.

Insurers requiring more roof replacements

But Belle points to the accumulated impact, noting that the figure could be in the millions of dollars in extra taxes that Sarasota residents are paying.

Insurance companies have been requiring many homeowners to replace shingle roofs well before manufacturing guidelines would say they need to be replaced. A shingle roof could last as long as 30 years against leaks, but it's become common for insurers to require owners to replace them at half — or even less — of the recommended lifespan in recent years.

North Port residents replaced 2,086 roofs in 2021, 6,212 in 2022 and already 7,036 roofs so far in 2023, according to data from a city of North Port spokesperson.

The average costs have also gone up from $14,850 in 2021 to $22,500 in 2023, which would also factor into how much of an increase in taxable value a property could see.

The increase in roof replacements in North Port in 2022 and 2023 may be attributed to Hurricane Ian's strike on the Gulf coast in late September 2022. State statute precludes hurricane repairs from increasing a property's taxable value, as long as the repairs are within 125% of the previous year's value.

Furst said his office uses aerial photography to identify hurricane damaged properties, while also noting that the office's website had a form for property owners to self-report hurricane related repairs so his office didn't include hurricane repairs when it assessed property.

Furst said he believes he has kept taxes low for Sarasota property owners, citing the county's status on a list maintained by the Florida Department of Revenue, which audits tax rolls and property values each year and will not certify them if property appraisers aren't within 10% of what their algorithms say property values are in a given jurisdiction.

Furst's office this year assessed property at an overall weighted mean of 90.5% of what the Department of Revenue believes it should be, the lowest among all 67 counties in the state.

He said he has sought other legal opinions since the Herald-Tribune raised the issue earlier and has requested an official opinion from state regulators. He's said he plans to meet with State Rep. Fiona McFarland to discuss the Legislature's intent on the matter and whether a change to the law is needed for clarity.

“We got a call in to the Department of Revenue to get guidance from them,” Furst said. “We are convinced we are doing it exactly as the statute says, but if we can do it differently and save taxpayers money, we certainly will do that."

Previous coverage: Rent a room and lose your homestead exemption? Supreme Court case with Sarasota ties could decide

Recent real estate news: Sarasota's proposed tallest building denied zoning changes; appeal goes to Planning Board

This article originally appeared on Sarasota Herald-Tribune: Insurer says you need a new roof? In Sarasota County, taxes go up, too