Property Tax Reform to Go to Florida Voters
Posted by Calum and Kathleen MacKenzie on Monday, December 21st, 2009 at 5:19am.Late Thursday evening Florida Lawmakers agreed on what their calling the “Largest Tax Cut in Florida’s History” and on January 29, 2008 Florida’s voters will let the legislature know what they think about their plan. This special legislative session, convened specifically to address Florida’s escalating property taxes, ended after a three day “on-again”, “off-again” tug-o-war between lawmakers looking to provide significant tax savings and lawmakers looking to stem cuts in education budgets.
The new plan that will go to voters in January is being called a "super-exemption" and here’s how it breaks down on your...
On your primary residence, there will be a 75% exemption on the first $200,000 of assessed value and an additional 15% exemption on the next $300,000 in assessed value. So if your home has an assessed value of $500,000, you would receive a $150,000 exemption on the first $200,000 in value, and an exemption of $45,000 for the next $300,000 in value, resulting in a total exemption of $195,000, the maximum benefit under the new plan.
Homes valued at $50,000 or less are completely exempt and if you qualify as a low-income senior you’re completely exempt up to $100,000.
Now, even if the plan passes in January, you will not be required to switch to the new “super-exemption”, if you feel you do better with the current “Save Our Homes” Amendment, which for many Florida residents who purchased their home 5 to 10 years ago, this is more likely the case. To understand how the “Save Our Homes” Amendment currently works read, Understanding Florida’s Real Estate Taxes.
So far there seems to be a couple of primary issues emerging. First expect the teachers, firefighters and police unions to quickly rally their teams to fight the plan as there are significant budget cuts entailed in the plan. Second, many homeowners feel the plan does not go far enough. Although the new plan provides significant savings for homes valued in the $200,000 to $300,000 range, with the average price of a home in Tampa pushing $400,000 in many neighborhoods, the plan does not go far enough. Residents that have been living in their current home for 5 to 10 years under the protection of the Save Our Homes Amendment are still going to find it too expensive to move or trade-up a new home.
Personally, I don’t think the plan is broad enough to help the majority of Florida homeowners. It also doesn’t go far enough to solve the inequities of the current system, whereby one homeowner, who purchased a home 10 years ago, pays $5,000 annually in taxes, yet his neighbor who purchases a near identical home today, even with the “super-exemption”, ends up paying over $7,000 annually. New Florida residents end up carrying a disproportionate portion of the taxes.
Will it pass? Although I think it’s probably too early to tell, I’m leaning towards, no. For now, I guess will have to wait for January 29th to know for sure.
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