Will privately-owned homes on Key West Naval base be subject to property tax?

The question of whether houses on military-owned land in Key West are subject to property taxes is headed to a November trial following a Monday hearing in Key West.

In 2007, the U.S. Navy transferred ownership of 895 houses in Key West to the private company Southeast Housing LLC. A previous tax exemption, based on federal ownership, went along with the transfer.

In 2011, then-Monroe County Property Appraiser Karl Borglum reversed the exemption and filed an $11.5 million lien seeking back taxes, penalties and interest for the military housing spread across Sigsbee Park, Trumbo Annex, Truman Annex, Peary Court and the Branch Medical Clinic on South Roosevelt Boulevard.

Attorneys for Southeast, a division of Balfour Beatty Communities, sued to get the lien lifted and have the exemption continue.

Monroe County Chief Circuit Court Judge David Audlin on Monday rejected motions for summary judgment from both sides and set a three-day trial beginning Nov. 20 at the Freeman justice Center.

Scott Russell, Borglum’s successor, has said the issue is simple: Federally owned properties are exempt while properties owned by private companies like Southeast are not.

In play is Senate Bill 354, adopted by the state Legislature and awaiting Gov. Rick Scott’s signature. The legislation would allow for tax exemptions for privately owned military housing as long as the home is actually occupied by a service member.

John Tupps, a spokesman for Scott’s office in Tallahassee, said, “We are reviewing the bill. The governor has until June 12 to act on the legislation.”

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Taxes