(Source: By Martha Brannigan, McClatchy Newspapers (MCT) – MIAMI — For years — decades, really — Miami-Dade homeowners have been ducking property taxes by illegally claiming homestead exemptions, usually with impunity.
There are people like Joseph and Sheron Barnes, who according to county records rented out a house at 1132 NE 84th Street and listed it as their permanent residence.
And there are others like the heirs of Willadean Allen, who records say left the lucrative homestead status on her home at 8605 SW 56th St. for 17 years after she died, chalking up tax savings year after year.
Still others double dipped, like Maria Eugenia Escagedo, also known as Maria Fleites, who records show claimed homestead on 13180 Old Cutler Rd. and on a second home, too.
But these days, gambling on getting caught is a fool’s game.
Homestead-exemption deceit has erupted into a red-hot issue in Miami-Dade and a crackdown is under way with all indications that it will only get tougher for tax cheats to elude detection.
The price of getting caught: Up to 10 years of unpaid back taxes, plus a 50 percent penalty and 15 percent annual interest. The biggest tab this year: $403,329.70 on the Barneses’ property.
Since January, six detectives from the Economic Crimes Bureau of the Miami-Dade Police Department have been working to bolster the muscle of 15 investigators at the Property Appraiser’s Office in nailing violators. That is up from two police detectives deployed in 2011 to tackle a backlog of 3,500 complaints (now about 2,166) which typically come from tips from neighbors, estranged spouses and others.
This May, Property Appraiser Pedro J. Garcia unveiled a new contract for software and services to flag suspicious claims among the 440,000 homestead properties.
For July alone, the property appraiser, armed with smarter tools, filed $11 million in homestead liens. That compares with $8 million filed for all of 2011.
Fueling the intensified scrutiny: money, of course.
Starved for revenue, interest groups at the county, the school district and cities are clamoring for tougher enforcement of homestead- exemption rules in hope of bringing in revenue to help save public jobs and programs threatened by the budget ax.
At the same time, the new use of data-mining tools to cross-check property records against an array of data from deaths to marriages to voter registrations to auto tags to water bills holds the promise of weeding out suspect exemptions in bulk, generating more and better leads than the hotlines and anonymous tips that have spawned many cases in the past.
The property appraiser’s fledgling foray into high-tech sleuthing came after a retired police major who ran the Economic Crimes Bureau, Jim DiBernardo, began pushing last fall for the county to get proactive against what he asserts are widespread violations costing perhaps hundreds of millions of dollars in lost tax revenue.
In September 2011, the Dade Police Benevolent Association, facing major concessions, trumpeted the need to get tough on tax cheats. The Property Appraiser’s Office disputes the estimates as inflated and said it was exploring data technology before homestead fraud became a hot public issue.
The difference in tax on a property with homestead and one without can be enormous. Homestead status excludes $50,000 from the assessed value (but only $25,000 for school taxes) used to calculate property taxes. But that exemption is peanuts compared to the savings many get from the Save Our Homes cap.
Under the Save Our Homes constitutional amendment, which took effect in 1995, the taxable value of homestead property can rise no more than 3 percent a year — no matter how much market value goes up.
Over time, the cap on assessments has spawned drastic tax differences on similar residences, with some people paying double or triple the taxes as a neighbor in a similar home, based on the value at the time homestead status was locked in.
Even with the historic collapse in home values, $13.4 billion in Miami-Dade residential value is excluded from taxation this year because of Save Our Homes. That is down from $66 billion in property value that was kept off the tax rolls by the cap in 2008 before the bubble burst.
With homestead status dating to 1996, the bayfront property on Northeast 84th Street owned by Joseph and Sheron Barnes had a taxable value of $489,554 in 2008 — less than a fifth of its market value of $2,682,813.
After investigating anonymous calls, the property appraiser’s office filed a lien on the property, seeking back taxes, penalties and interest totaling $403.329.70 — the largest lien so far this year.
The property appraiser claims the home was rented in 2005. That would nullify its homestead status, unless the owners had moved back in and reapplied, said deputy property appraiser Lazaro Solis.
Other reasons for the big tab: Property appraiser records say the home, which is in foreclosure, was abandoned. The Barneses couldn’t be reached for comment.
After a lien is filed, the county doesn’t sell tax certificates or seek foreclosure. But the tax bill must be paid before a property can be refinanced. When a property with a tax lien is sold, the county and other taxing authorities like the school district are the first in line to collect — ahead of any mortgage holder.
Some people pay the bill right away. That was the case with Escagedo, who owns the home at 13180 Old Cutler Road. She recently paid $156,676.85 for back taxes, penalties and interest for 2001 through 2010 after the property appraiser sent her a notice of back taxes due because she also had a homestead exemption for 13720 Farmer Rd.
Reached by telephone, Escagedo said she paid the tax bill promptly and didn’t want to air the details. “There was no lien filed,’’ she said.
Florida requires that a homestead be the “permanent residence to the exclusion of all others.” Her tax bill for loss of homestead ranked among the top 10 this year.
©2012 The Miami Herald
Visit The Miami Herald at www.miamiherald.com
Distributed by MCT Information Services