PTO Bulletin 18-03 IProperty Tax Oversight I Bulletin: PTO 18-03 I
To: Value Adjustment Board Attorneys
From: Steve Keller, Property Tax Oversight, Office of General Counsel
Date: September 28, 2018
Bulletin: PTO 18-03
FLORIDA DEPARTMENT OF REVENUE
PROPERTY TAX INFORMATIONAL BULLETIN
Value Adjustment Board
Substantial Completion and Qualifying Improvement
This bulletin will advise of the issuance of attorney general opinion AGO 2018-02 dated
May 31, 2018 on the subject of value adjustment board and substantial completion.
In that opinion, the attorney general considered a special magistrate's authority to hear
taxpayer appeals from assessment valuations based on the disputed status of
improvements to real property as substantially completed. The opinion referenced
sections 192.042(1), 193.1555(5)(a), 194.011(3)(d), and 194.035(1), F.S. (2017). These
statutes provide for assessment issues that the VAB can administratively review and the
types of special magistrates that hear these issues. The attorney general gave the
following opinions:
(1) Whether improvements to property were "substantially completed" as of January 1 is
a valuation issue and a value adjustment board has authority to hear petitions of such
issue under sections 192.042(1), and 194.011(3)(d), F.S.
(2) For real property that is governed by section 193.1555, F.S., whether improvements
were "substantially completed" as of January 1 is an issue that must be heard by an
attorney special magistrate if, pursuant to the challenged assessment, the subject
improvement increases the just value of the real property by at least 25 percent.
Section 193.1555(5), F.S. sets forth a general rule, subject to exceptions: "property
assessed under this section shall be assessed at just value as of January 1 of the year
following a qualifying improvement or change of ownership or control." For real
property that is governed by section 193.1555, F.S., a qualifying improvement means
any substantially completed improvement that increases the just value of the property
by at least 25 percent. Section 193.1555(5)(a), F.S.
Section 193.1555, F.S. governs nonresidential real property that is not subject to the
assessment limitations set forth in Art. VII, sections 4(a), (b), (c), (d), or (g), Florida
Constitution [section 193.1555(1)(a), F.S.] and residential real property that is not
assessed under s. 193.155 or s. 193.1554, F.S. [section 193.1555(2), F.S.]
If you have any questions, please contact Steve Keller at 850-617-8347.
Florida Attorney General Advisory Legal Opinion
Number: AGO 2018-02
Date: May 31, 2018
Subject: Value adjustment board and substantial completion
Mr. Aaron B. Thalwitzer
Legal Counsel, Volusia County VAB
1990 West New Haven Avenue
Second Floor
Melbourne, Florida 32904
RE: REAL PROPERTY ASSESSMENTS, VALUE ADJUSTMENT BOARD — authority to
hear taxpayer appeal from assessment valuation based on disputed status of improvement
to real property as substantially completed. §§ 192.042(1), 193.1555(5)(a), 194.011(3)(d),
and 194.035(1), Fla. Stat. (2017).
Dear Mr. Thalwitzer:
On behalf of the Volusia County Value Adjustment Board, you have requested an opinion
regarding the following issues:
(1) Whether a value adjustment board ("VAB") has authority to hear taxpayer petitions
appealing whether, under section 192.042(1), Florida Statutes (2017), improvements to
property were "substantially completed" as of January 1, and if so, what is the source of the
VAB's legal authority?
(2) If the answer to question 1 is yes, whether a petition to a VAB appealing whether, under
section 192.042(1), improvements to property were "substantially completed" as of January
I must be heard by an attorney special magistrate, or a valuation special magistrate?
In sum:
(1) Pursuant to section 194.011(3)(d), because the issue of whether improvements to
property were "substantially completed" as of January 1 is part of the valuation appraisal
process, a value adjustment board has authority to hear the petitions of taxpayers appealing
whether, under section 192.042(1), improvements to real property were "substantially
completed" as of January 1.
(2) Pursuant to sections 193.1555 and 194.035, a petition to a value adjustment board
appealing whether, under section 192.042(1), improvements were "substantially completed"
as of January 1 must be heard by an attorney special magistrate if, pursuant to the
challenged assessment, the subject improvement increases the just value of the real
property by at least 25 percent; improvements effecting an increase in an amount below
that threshold percentage pursuant to the challenged assessment should be heard by a
valuation special magistrate.
QUESTION ONE
Section 192.042(1), Florida Statutes, provides that all property "shall be assessed according
to its just value as follows":
"Real property, on January 1 of each year. Improvements or portions not substantially
completed on January 1 shall have no value placed thereon. 'Substantially completed' shall
mean that the improvement or some self-sufficient unit within it can be used for the purpose
for which it was constructed."
Under this statute, if a taxpayer's improvement (or self-sufficient unit within it) is not
"substantially completed" on January 1 of the subject year, "the assessment valuation for
that year is to consist solely of the value of [the taxpayer's] land as if it were vacant."[1]
"Although the improvement is not taxed under such a circumstance, this is not an exemption
from taxation; rather it is a part of the valuation appraisal process."[2]
Section 194.011(3)(d) establishes the procedure by which a taxpayer may challenge, before
the value adjustment board, decisions of the property appraiser"as to valuation issues."
Therefore, read in pari materia, sections 192.042(1) and 194.011(3)(d) supply the VAB's
legal authority to hear the petitions of taxpayers appealing whether improvements to
property were "substantially completed" as of January 1.
QUESTION TWO
You next ask whether such an appeal should be heard by an attorney special magistrate or
a valuation special magistrate. Sections 193.1555(5)(a) and 194.035, Florida Statutes,
answer this question.
Section 194.035(1) provides, in pertinent part, that a "special magistrate appointed to
hear...determinations that a...qualifying improvement has occurred shall be a member of
The Florida Bar with no less than 5 years' experience in the area of ad valorem taxation. A
"special magistrate appointed to hear issues regarding the valuation of real estate shall be a
state certified real estate appraiser with not less than 5 years' experience in real property
valuation." Section 193.1555(5)(a), in turn, defines a "qualifying improvement" as "any
substantially completed improvement that increases the just value of the property by at least
25 percent."
Therefore, if the assessment valuation based on a challenged determination of substantial
completion reflects an increase in the just value of the property of at least 25 percent, the
appeal should be heard by an attorney special magistrate. If the assessment valuation
based on a challenged determination of substantial completion reflects an increase in the
just value of the property of less than 25 percent, the appeal should be heard by a valuation
special magistrate.
Based on the foregoing, it is my opinion that the Volusia County Value Adjustment Board
has authority to hear taxpayers' petitions appealing whether, under section 192.042(1), an
improvement to property was "substantially completed" as of January 1. Challenges to
assessments reflecting an increase, based on a disputed improvement, in the just value of
the property of at least 25 percent shall be heard by an attorney special magistrate, and
challenges to assessments reflecting an increase, based on a disputed improvement, in the
just value of the property of less than 25 percent shall be heard by a valuation special
magistrate.
Sincerely,
Pam Bondi
Attorney General
PB/ttlm
[1] Klein v. Robbins, 947 So. 2d 623, 624 (Fla. 3d DCA 2007) (citing Sunset Harbour Condo.
Ass'n v. Robbins, 914 So. 2d 925, 932 (Fla. 2005), as revised on denial of reh'g (Nov. 3, 2005)
("This statute reflects the Legislature's intent to delay valuation of improvements to property until
such time as these improvements are substantially completed.")).
[2] Id. (Emphasis supplied.)