Condo owners on Pensacola Beach celebrate win in court over property tax

Image: Property Tax Source: Sharon Hahn Darlin / CC BY 2.0

Some condo owners on Pensacola Beach celebrated a big win in court on Wednesday. An appeals court ruled 2-1 that Portofino Resort and the Beach Club condos do not have to pay property taxes on the land their buildings are on because it is owned by the county.

"Obviously they're thrilled," said attorney Todd Harris. "They're just like everybody else, they have questions about what's next."

Harris is with R. Todd Harris, McDonald Fleming Moorhead Attorneys at Law. He represents the 765 members of the Portofino Resort and 93 members of the Beach Club. In 2011, a court opinion allowed the county to begin collecting taxes on the land. The court said leases that automatically renewed every 99 years amounted to taxable real estate. In 2016, attorneys successfully argued another case that said leases that do not automatically renew are different. The county can take back the land after the lease is up and therefore is subject to different rules. That means the county cannot charge property taxes on those "non-perpetual" leases.

"When you have leases that are not perpetual on Pensacola Beach and the land is owned by the government, then those leases cannot be taxed at an ad valorem rate," Harris explained. "They can only be subjected to intangible personal property taxes."

Escambia Property Appraiser Chris Jones told WEAR-TV that he plans to appeal the decision. He said he was disappointed in the ruling and respectfully disagrees with it.

"Taxation should be a fairness issue," Jones said. "If you have two neighbors that have the exact same house, on the exact same lot on Pensacola Beach, one is paying half the taxes than the other because of one word- "re-negotiate"- in their lease, that seems like a stretch, a bit unfair."

The county can still charge property taxes on the improvements on the leased land. Jones said they now have to figure out the value of the property without the land.

"I'm rather certain that the next difference of opinion could possibly be what's that exemption amount," Jones said.

He said he cannot speculate what the refund to condo owners will be. He said the money is in escrow. Harris expects it to be in the millions.

"It's been a long battle and they've had the fortitude, I guess to stick with it and certainly they're eager, as is everybody on both sides to bring this to a final resolution," Harris said.

There are roughly 30 similar cases in court currently. Jones said the ruling could set a precedent for them.

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