New Florida Property Tax Plan
Florida House Speaker Marco Rubio has introduced a new property tax reform proposal, basing a type of Homestead Exemption on a home’s value. This plan is a step in a different direction from his preferred plan of eliminating property taxes and adding a higher state sales tax.
Rubio states that this new concept still meets the three House goals of reducing local government taxes and spending; providing substantial immediate tax relief to homeowners; and allowing voters to have their say in meaningful and comprehensive tax reform. While the exact numbers of the plan may still be up for negotiations, essentially it would work like this:
Homes with a market value up to $300,000:
Properties would be taxed on 20% of their market value.
Example: Value: $250,000 x 20% = $50,000.
Homeowner would pay property taxes on the $50,000.
Homes with a market value over $300,000 but less than $1,000,000:
Properties would be taxed on 20% of their market value for the 1st $300,000 and then 30% of the balance over $300,000.
Example: Value: $500,000. $300,000 x 20% = $60,000. $200,000 x 30% = $60,000. Homeowner would pay property taxes on $120,000 ($60,000 for part 1, $60,000 for part 2).
Homes with a market value over $1,000,000:
Properties would be taxed on 20% of their market value for the 1st $300,000; then 30% of the value between $300,000 and $1,000,000 ($700,000); and then 70% of the remaining value over $1,000,000.
Example: Value: $2,000,000. $300,000 x 20% = $60,000. $700,000 x 30% = $210,000. $1,000,000 x 70% = $700,000.
Homeowner would pay property taxes on the $970,000 ($60,000 for part 1, $210,000 for part 2, and $700,000 for part 3).
With this plan, the new tax amount ($50,000 in example 1 for instance) would then be multiplied by the city or county millage rate to figure your annual tax. It was unclear whether or not millage rates would be adjsted in light of the proposal, if passed.
Bottom line? The average homeowner with a homestead exemption would see their property taxes cut in half, maybe more. However, besides the exact percentages to be hammered out, the House and Senate would still have to look at the drop in revenue to the local governments and if a sales tax increase would still be needed.
Rubio states that this new concept still meets the three House goals of reducing local government taxes and spending; providing substantial immediate tax relief to homeowners; and allowing voters to have their say in meaningful and comprehensive tax reform. While the exact numbers of the plan may still be up for negotiations, essentially it would work like this:
Homes with a market value up to $300,000:
Properties would be taxed on 20% of their market value.
Example: Value: $250,000 x 20% = $50,000.
Homeowner would pay property taxes on the $50,000.
Homes with a market value over $300,000 but less than $1,000,000:
Properties would be taxed on 20% of their market value for the 1st $300,000 and then 30% of the balance over $300,000.
Example: Value: $500,000. $300,000 x 20% = $60,000. $200,000 x 30% = $60,000. Homeowner would pay property taxes on $120,000 ($60,000 for part 1, $60,000 for part 2).
Homes with a market value over $1,000,000:
Properties would be taxed on 20% of their market value for the 1st $300,000; then 30% of the value between $300,000 and $1,000,000 ($700,000); and then 70% of the remaining value over $1,000,000.
Example: Value: $2,000,000. $300,000 x 20% = $60,000. $700,000 x 30% = $210,000. $1,000,000 x 70% = $700,000.
Homeowner would pay property taxes on the $970,000 ($60,000 for part 1, $210,000 for part 2, and $700,000 for part 3).
With this plan, the new tax amount ($50,000 in example 1 for instance) would then be multiplied by the city or county millage rate to figure your annual tax. It was unclear whether or not millage rates would be adjsted in light of the proposal, if passed.
Bottom line? The average homeowner with a homestead exemption would see their property taxes cut in half, maybe more. However, besides the exact percentages to be hammered out, the House and Senate would still have to look at the drop in revenue to the local governments and if a sales tax increase would still be needed.
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