A report of Lake Worth property by consulting firm Government Services Group shows that 363 residential properties in the city pay nothing in property taxes.
A low assessed value combined with a homestead exemption puts the taxable value of the homes at zero, meaning the owners don’t have to pay anything, according to this Palm Beach Post story.
The study was conducted as the city works to develop a per-building fire assessment that Lake Worth hopes to impose for the budget year starting Oct. 1.
About a third of the city’s residential properties pay taxes on values of $25,000 or less, giving them a very small tax bill. Almost half of Lake Worth’s residential properties are valued at $60,000 or less. How is it possible that so many properties have such low values?
When Lake Worth was established in 1912, lots for residential properties were 25 feet wide. They were given away as incentives to people who bought farmland. Now those pieces of land hold small homes that have low values. And while the values of the homes rocketed up during the real estate boom, they’ve fallen off to 2002 levels since then.
Many of the homes that pay no property taxes because of low values are abandoned or vacant properties, many in very poor neighborhoods, that the city is trying to buy using funds from a $23.2 million federal grant.
The fact that so many homes have such low values is a big reason why Lake Worth wants to implement a $60 annual assessment per home as a way of covering the cost of firefighter pensions.
The city will vote on the fire assessment later this month. The assessments are expected to raise $1.4 million, almost enough to cover the $1.8 million annual cost of firefighter pensions. The city believes the per-building assessment is fair because it spreads the responsibility out to everyone who receives fire service.
Under the proposal, about 77 percent of the city’s residential property owners will pay more for firefighter pensions than they do through a property tax levy that raises the same amount of money. Twenty-three percent will pay less.