Archive for the 'Florida Property Tax' Category

Florida Property Tax Reform Update

Saturday, October 20th, 2007

For over a year many people have been advocating for Florida property tax reform that is comprehensive and not just a simple tax cut. These messages have been clearly delivered to the legislature that reform needs to address all property types – not just Homestead property owners.

Yesterday afternoon the Florida House of Representatives released a revised property tax relief proposal that will be considered on Monday. This plan includes provisions advocated by both Republicans and Democrats in the House.

In addition to Portability which is being embraced by the Governor, Senate and House, this new House proposal includes a five percent assessment cap on Commercial and non-homestead property. This is intended to provide the predictability and stability that non-homestead property owners have been advocating for.

The House is also advocating a new homestead exemption that, instead of doubling the current $25,000 exemption, would guarantee a minimum Save Our Homes exemption of 40% of the county median home value. House leaders believe this will provide relief to not only new buyers but those who have purchased in recent years.

Again, we expect the House to begin consideration of this proposal on Monday. Both the House and Senate plans that are being considered maintain the current Save Our Homes structure and provide for portability of Save Our Homes.
Attached is a side-by-side that gives more detail on the current Senate and House proposals.
Here is a complete list of the issues being proposed in the House plan today:

  • Instead of doubling the homestead exemption, this exemption is tied to the county’s median home value and will target relief to all homestead property owners (not just first time buyers). Again, the exemption would be 40% of area median.
  • Save Our Homes-like cap on non-homestead and commercial property to help restore fairness, equity and predictability to our property tax system by capping any increase at 5%. This will help businesses who have faced outrageous tax increases and owners of second homes (Snowbirds).
  • Portability – homeowners may transfer their Save Our Homes benefits to a new homestead anywhere in Florida within 2 years of leaving their former homestead.
  • Creates a new Tangible Personal Property Exemption of $25,000
  • Limits the authority of local governments to increase property taxes
  • Provides for limitations on assessed values of properties used for affordable housing
  • Provides an assessment growth limitation for all non-homestead properties in Florida by 5%
  • Creates more flexibility for the Legislature to limit assessments for working waterfront properties
  • Election of all county property appraisers
  • Hopefully the outcome on Monday is positive. This so far looks like the most reasonable solution being that it also includes landlords, snowbirds, and commercial property owners. Finally!

Florida Property Tax Break Gathers Momentum

Tuesday, July 24th, 2007

After looking like it was headed toward a January ballot as a political orphan, the Legislature’s big property-tax initiative is finally attracting a few sugar daddies.

The Florida Association of Realtors pledged to spend $1 million urging voters to endorse the measure to create a supersize homestead exemption of as much as $195,000 on a $500,000 house. Realtors say it will kick-start a stalled housing market.

Then, Associated Industries of Florida President Barney Bishop said he would ask his board of directors to spend some cash on a campaign for the proposed constitutional amendment, even though he acknowledged it provides little tax relief to businesses.

Read More…

Florida cities and counties raising fees to offset property tax reductions

Tuesday, July 24th, 2007

Cities and counties across Florida are tightening their belts as they face a state-ordered cut in property-tax collections ranging as high as 9 percent this year.

But local governments are finding other ways to tap into residents’ wallets.

Scores are slapping higher fees on everything from water, sewer and fire protection to burial plots, overdue library books, admission to parks and pools and garbage pickup.

Read More…

Martin County homeowners to get property tax break

Tuesday, July 24th, 2007

The average Martin County homeowner will see a $154 break on the county portion of their property tax bills as the county unanimously approved its $394 million budget for the year beginning Oct. 1.

Read More…

State Panel Delays Florida Property Tax Changes

Tuesday, July 24th, 2007

The panel that meets every 20 years to recommend changes to the state’s tax system and budget structure will not weigh in on property tax changes until after voters give a thumbs up or down to a legislative remedy on the issue in January.

Taxation and Budget Reform Commission Chairman Allan Bense told his members Friday that the commission should not influence the outcome of the Jan. 29 election by floating its own proposals.

Read more here… 

Florida Tax Reform – Help Spread the Word

Monday, July 23rd, 2007

Florida realtors are helping to spread the word about the upcoming Florida tax reform issue that will appear on ballots in the 2008 election.  Click here to view an article about support from realtors in Brevard County:

 Support Florida Property Tax Reform

Are Local Florida Counties Fighting Property Tax Cuts Inspite of Reserves?

Tuesday, June 19th, 2007

Florida City and county government officials are accusing Gov. Charlie Crist of deliberately putting out false information in an effort to win property-tax cuts.

They’re reacting to Crist’s assertion that local governments are fighting property-tax cuts even as they sit atop $9 billion in reserves. Local officials say the governor’s “reserves” are grossly inflated, lumping general-fund reserves from unspent property taxes with other pools of money, including debt reserves and money for construction projects.

Read full article Here

Florida Special Session on Property Tax Has Adjourned

Friday, June 15th, 2007

The Florida House of Representatives and Senate passed all three bills making up the Florida property tax reform package. The package includes a statutory rollback and cap of real estate tax rates, a proposed constitutional amendment creating a Florida “super homestead exemption” and a bill designating the upcoming January 29, 2008 presidential preference primary as the date for Floridians to vote on the “super homestead exemption” amendment.

Here is an overview and outcome of the special session broken down by the specific issue:

Statutory Millage Rate Rollback

  • Millage rollbacks will be required of cities, counties and special districts for FY 2007-08 taxes (November 2008 tax bills). Rollbacks will not be required for school taxes.
  • Rollback required will be to 2006-07 revenue levels, plus an additional cut based upon a local government’s 5-year history of property taxes on a per capita basis compared to statewide average taxes on a per capita basis.
  • Statewide average will be calculated separately for cities and counties. Cities and counties will be required to rollback 0% to 9% (0, 3, 5 or 9%).
  • Special districts will be required to rollback and cut 3%.
  • Local governments can override the rollback by extraordinary vote.
  • Vote required is:
    • 2/3 to exceed reduced level + tax on new construction up to 2007-08 revenues;
    • unanimous to exceed 2007-08 “rolled back rate” and go up to 2006-07 actual millage rate;
    • voter referendum to exceed the 2006-07 actual millage rates.

 

Comments

  • Provides potential for across-the-board tax relief in estimated amount of $15.6 billion over 5 years.
  • Does not apply to school taxes (approximately 40% of the property tax bill).
  • Requires greater reductions from those cities and counties who increased taxes the most on per capita basis between FY 2001-02 and 2006-06.
  • Not applicable to debt service millage, so tends to favor local governments that relied upon bonding over those who paid cash.
  • Municipal service taxing units and dependent districts, the predominant purpose of which is emergency medical or fire rescue services, are treated like independent special districts.
  • Cities and counties of “special financial concern” receive preferential treatment.
  • Revenues used to fund public hospitals in counties that levy hospital surtax receive preferential treatment.

Statutory Caps on Millage

  • Future millage increases after FY 2007-08 for cities, counties and special districts will be limited to the “rolled-back rate,” (rate that produces same taxes as prior year, exclusive of taxes from new construction) plus growth in personal income.
  • Local governments can override the cap by extraordinary vote.
  • (a) 2/3 vote of board for up to 10% increase over rolled back rate;
  • (b) unanimous vote of board for increase in excess of 10%, unless board exceeds 9 members, in which case required vote is 3/4

Comments

  • School taxes will not be capped.
  • Fees, assessments and other revenue sources are not capped.

Increased Millage Rates to Offset Constitutional Tax Base Reductions

  • If the constitutional amendment passes, cities, counties and special districts in FY 2008-09 can override caps in order to make up the loss in tax base from the homestead exemption and other exemptions/reductions.
  • Local governments can override the cap by extraordinary vote.
    • (a) by a 2/3 vote, the rate can be increased to restore 67% of the difference between the rate that would apply absent the base reduction and the true rolled-back rate; and
    • (b) by a unanimous vote, or 3/4 vote for board with 9 members or more, any rate can be imposed.

Comments

  • Substantial tax base reductions—particularly from the new super homestead exemption—will put pressure on local governments to utilize these override mechanisms to raise millage rates to make up for taxes lost to base reductions.

Constitutional Relief

  • Place on ballot for January 29, 2008 presidential preference primary election

Comments

  • If approved by the voters in January 2008, the constitutional relief would be applicable retroactively to January 1, 2008.Constitutional changes must be approved by at least 60% of the voters, and some have suggested that elimination of SOH triggers 66% vote.

Super Homestead Exemption

  • Homeowners can opt out of current Save Our Homes cap and $25,000 homestead exemption and opt into a new, 2-tiered “super homestead exemption.” Tier 1 will exempt 75% of first $200,000, with a minimum exemption of $50,000. Tier 2 will exempt 15% of next $300,000. Opt-out of Save Our Homes is irrevocable. 1st-time home buyers and those who move will not have option for SOH cap.

Comments

  • Applies to all tax bases including schools, but legislature stated intent to hold schools harmless from cuts. However, public promises by House leadership not to increase required local efforts rates suggests the Legislature will need to look elsewhere for the up to $1.5 to $2 billion per year in school property tax reductions anticipated as a result of reductions to the base.
  • Unknown. No revenue impact analysis done on amendment giving homeowners option.

Future Homestead Increases

  • Constitutional amendment annually increases $500,000 maximum value against which 15% exemption is applied by growth in personal income. Also authorizes Legislature, by 2/3 vote, to increase the homestead exemption.

Comments

  • Super homestead exemption is repealed if constitution amended to provide for assessing homestead property at less than just value.

Minimum Homestead Exemptions

  • Constitutional amendment guarantees a minimum homestead exemption of $50,000, ($100,000 to low income seniors).

Comments

  • Low income seniors exemption applies to those 65 and older whose household income is $20,000 or less.

More details coming on the following items:

  • Non-Homestead Residential Property Exemption
  • Commercial Property Exemption
  • Tangible Personal Property Exemption
  • Working Waterfronts
  • Affordable Housing
  • Valuation—Highest and Best Use
  • Valuation—Deed Restrictions

 

Florida Property Tax Reform Could Go To a Vote Today

Thursday, June 14th, 2007

The Florida Legislature could vote as early as today on its property tax reform plan. The Florida Association of Realtors® (FAR) issued a Call-to-Action earlier today, asking Realtors to tell their lawmakers that the proposal does not go far enough.

Key Florida property tax issues cited by FAR include:

Inadequate relief for non-homestead and commercial properties. Commercial property owners have suffered annual tax increases of 20, 30 and up to 50 percent over the past five years, and FAR supports a greater property tax cut than the 9 percent currently proposed.

The “Super Homestead” exemption. Realtors support this proposed amendment to the Florida Constitution, especially in that the exemption increases along with any increase in inflation, and can be increased by a two-thirds vote of the Legislature if the constitutional amendment passes.

Save Our Homes. Realtors support phasing out this amendment in the Florida Constitution. The Legislature needs to address the pent-up and growing demand of residents who either need to move but can’t, or want to move but know it’s not in their best interest to do so.

“Present use” and not “highest and best use.” Commercial property needs to pay a property tax based on its present use. “Highest and best use” standards have led to abuse throughout the state, according to FAR, causing commercial and business property owners to pay unwarranted high taxes. If not included in the current reform package, FAR will continue to address the issue in future legislative sessions.

Jan. 29, 2008, election. Realtors support putting constitutional tax reform for Florida on the Jan. 29, 2008, presidential preference primary ballot.

Has Florida Legislature Reached an Agreement on Florida Property Tax Reform?

Tuesday, June 12th, 2007

TALLAHASSEE, Fla. – June 11, 2007 – We have a deal. Senate President Ken Pruitt (R-Port St. Lucie) and House Speaker Marco Rubio (R-Miami) announced that they’ve reached an agreement to cut property taxes in Florida.

The property tax reform is a complicated, two-step formula that would offer moderate relief this year and greater relief next year. Homesteaded owners win most, but commercial interests also benefit. Details will be discussed starting tomorrow, the first day of the Florida Legislature’s special session, with a vote possible before the scheduled end on June 22.

Step 1

The two steps operate independently and cut taxes in different ways. Step one can be accomplished immediately if approved by the Legislature and signed by Florida Governor Charlie Crist. Under this step, all cities and counties will be required to cut taxes in the upcoming 2007-2008 fiscal year to the 2006-2007 revenue levels. After determining that level, each local government will then be required to make an additional cut of 3 percent, 5 percent, 7 percent or 9 percent.

The specific amount each local government must cut depends on a formula. Rubio and Pruitt say they’ll calculate property taxes over five years and use a statewide average of increases as a baseline. They will then compare each local property tax increase to that baseline number. Local governments on the high side must institute an additional 7 to 9 percent decrease; those on the low side must cut by 3 to 5 percent. Special taxing districts and fiscally limited cities and counties will be required to cut taxes to the 2006-2007 revenue levels and make an additional cut of 3 percent.

Finally, local governments may increase tax revenues over time but only by an amount based on local increases in personal income and new construction.

However, local governments would be able to override the proposed cut and caps, and the method – supermajority vote, referendum, etc. – for override approval would depend on the magnitude of the change.

Step 2

To amend the Constitution, voters will be asked to replace “Save Our Homes” and the $25,000 homestead exemption with a new “super exemption.” This would give most homeowners increased savings, and also open the market to anyone seeking homestead property, including new residents and first-time buyers who now start from scratch and pay property taxes on the full value of the property their first year. Passage would require approval from 60 percent of voters.

The exemption has two tiers:

Tier 1: Homestead property will receive an exemption of 75 percent of the first $200,000 in value of the home; or, put another way, a taxable value of $50,000. The minimum exemption is $50,000 per homestead.

Tier 2: In addition to Tier 1, homestead property will obtain another 15 percent exemption for the next $300,000 in value. A $350,000 property, for example, would have a taxable value of $177,500 – $50,000 on the first $200,000, and $127,000 on the additional $150,000.

If a homeowner would benefit more from the existing Save Our Homes exemption – generally long-term owners – he will be able allowed to retain that benefit until he sells the home. Legislators have also agreed to address issues such as relief for low-income elderly taxpayers, incentives for affordable housing and tax reform for “working waterfronts” and small businesses. Other details need to be worked out.