Florida Voters To Decide Property Tax Fate

After regular sessions, special sessions and meetings in between, the Florida House and Senate have outlined more details on their property tax proposal. While the percentages of the exemptions are not as large as the first draft by House Speaker Marco Rubio (R-West Miami), they still mean significant savings to Florida home owners. More than $31 billion over the next 5 years, to be exact. Now, the voters in Florida will be voicing their opinions about more than Presidential Primaries come late January, 2008.

Here's how the proposed tiered property tax percentages would work:.

Homes valued up to $200,000: Properties would be taxed on 25% of their market value. There would be a minimum tax exemption of $50,000 (double the current homestead exemption of a flat $25,000). The next $300,000 of value would receive a 15% exemption. Let's take a look at a comparison between the proposal and the current Homestead Exemption.

Example 1, Value: $190,000
Proposed Plan: $190,000 x 25% = $47,500. Homeowner would pay property taxes on $47,500.
Current Exemption: $190,000 - $25,000 = $165,000. Homeowner pays property taxes on $165,000.

Example 2, Value: $350,000
Proposed Plan: $200,000 x 25% = $50,000 (Tier 1). $150,000 x 85% = $127,500 (Tier 2).
$50,000 + $127,500 = $177,500. Homeowner would pay property taxes on $177,500.
Current Exemption: $350,000 - $25,000 = $325,000. Homeowner pays property taxes on $325,000.

Future property tax increases, and their revenues, would be capped to coincide with personal income growth and new construction. Existing exemptions for disabled veterans, low income seniors, and agricultural land will not be eliminated by this plan.

This plan also calls for a current government "freeze" of this years revenue, then cut an additional percentage. In Hillsborough County the cut is 5%. That means trimming about $40 Million dollars worth of fat from the county budget. Those opposed to the new plan claim that the only way to free up that kind of money and receive less in the way of taxes is to cut some programs and drastically scale down others. The first things mentioned in the argument are closing fire stations, reducing head counts by laying off police, firefighters and EMT's, and closing libraries.

While the detailed amounts of the financial impact to the counties is not yet available, the implied economic doom and gloom has one flaw that can not be ignored. Property taxes and insurance have many potential homebuyers playing the waiting game. In a time where foreclosures are increasing, and others are worrying about it, out of control taxes and insurance have not helped the current real estate market condition. Many are afraid of buying a home right now, meanwhile the inventory of homes on the market are moving slower. With insurance issues beginning to be addressed in Tallahassee, a huge (tax) burden being relieved may be just what the doctor ordered...and just in time. More choices of insurers and dramatic tax reform could have a hand in kick starting a more active real estate market. Buyer confidence in attaining an affordable home means sellers may be able to breathe a little easier. After all, not everyone who is selling their house is moving out of the state. They may simply be moving up, downsizing, etc. Many of these sellers are also buyers...buyers who understand what the sellers are going through.

Over the next 6 to 7 months arguments for and against the proposed plan will be headline news across this state. It's as inevitable as the 3:00pm - 6:00pm thunderstorm on a Florida summer afternoon.

As more details find their way to the surface, I'll be sure to post them here. Don't forget to enter your e-mail address on this page to subscribe to updates. In the meantime, feel free to explore other articles in the archive.