Dramatic rise in commercial property values causes tax hikes for small business owners

Black and white photos show a rundown service station in terrible condition in 1996 in Miami. That is how Domingo Llerandi says he found it when he bought it for $85,000 that year.

“The whole family chipped in,” Llerandi said. “The goal was to make the dream of owning their own business a reality.”

Over the next 20 years, the family fixed up the place until it ended up looking like it does today. And like everything else, the value of the property increased gradually, but this past year, the market value doubled, from $864,071 to $1,737,144.

“I know they have to go up, but no more than 10 percent,” Llerandi said.

That ten percent that Domingo Llerandi refers to is the tax assessed value of the property, which by law, can only increase 10 percent a year on commercial properties.

When NBC6 reviewed the property at 5402 Northwest 7th Avenue in Miami, the assessed value increased from $564,207 to $620,627, which is 10 percent, however, his estimated tax bill went from $13,606.85 to $19,804.39 which is a 46% increase.

When NBC6 asked the Miami-Dade Property Appraiser Pedro Garcia about the jump in Llerandi’s tax bill, he explained that, while there is a 10% cap on the assessed value of a commercial property, the School Board taxes are set using the market value.

So, if you look closely, last year Llerandi paid $5,788.41 in school board taxes and this year he will have to pay $11,468.62 because that tax is calculated using the market value of $1.7 million.

Llerandi said he fears these increases will force him to sell his property in the future.

“It’s a prime location. You can see it’s a lot of new developments. They’re going in that area,” said Garcia.

A map of the area with the new property values shows Llerandi is not alone.

“Every single property that you see in Miami-Dade County is a tremendous increase. We have so many people coming into Miami and we and the property is still increasing and the main increase that we have on the land,” Garcia said.

For small business owners like Llerandi, that means trying to stay afloat while developers envision buying off surrounding properties to build large apartment complexes.

Property owners who disagree with the assessed or market value of their home can request a hearing with the value adjustment board to appeal it. There they will be able to show comparable sales and other evidence to argue their point.

The deadline to do that this year was September 17th.

Llerandi managed to submit his appeal on time and is waiting to see if he gets results.