Buyer Resources - Taxes - Short Sales, Foreclosures, and Taxes
If you purchase a property in a foreclosure or short sale, your actual purchase price may not reflect the just
(market) value used for determining your taxes. Instead, Florida law requires taxes to be based on the
reasonable market price of a sale of similar homes in your neighborhood (or a similar area) sold under
normal financial conditions to determine the assessment.
Regardless of your 2008 purchase price, assessments in Florida are done a year in arrears. This means
your 2008 assessment is based on the sales in your neighborhood (excluding foreclosures, short sales and
non-arm's length transactions) between January 2, 2007 and January 1, 2008.
Short sales may also have tax implications and you should consult your tax advisor about a particular
transaction and how it relates to your circumstances. The Florida Department of Revenue recently issued an
advisory opinion at the request of the Florida Association of Realtors. You can download that opinion by
clicking here.