Vol 6 No. 38 - June14, 2006

Runaway taxes plague property owners

By Louise Bolger

You’ve heard about the runaway bride, well, it seems the entire country is experiencing runaway taxes. It doesn’t matter if you live on Anna Maria Island or in Atlanta, Georgia, if your home has increased in value during the past five years, chances are your property taxes have increased as well.

Because of Florida’s Save Our Homes amendment and Homestead Exemption, full-time Florida residents have been spared the full extent of property tax increases that have been experienced in states without homestead exemptions. However, non-homesteaded property owners and business owners in Florida have been thrown to the lions.

On Anna Maria Island CART, The Coalition Against Runaway Taxation, is organizing to find a way to help resort and business owners on the Island stabilize the tax structure. This is going on in other parts of the country as well. Twenty states have legislative proposals, citizen initiatives and lawsuits on their agendas to address property owners concerns and distrust of how their tax money is being assessed and dispersed.

If businesses and non-homesteaded owners are forced to leave the Island, who will take their place? This is a serious question affecting everyone, including those of us who are homesteaded. So much of our successful local economy is based on tourists and seasonal visitors that a decrease in this business would be felt by everyone.

Good for you if the home you purchased for $200,000 seven years ago is now worth $1,000,000, but the person buying it will be faced with about $15,000 in taxes for starters, a number not everyone is willing or able to absorb. The net result could be a decrease in the pool of buyers.

I saw this happen in the northeast 15 years ago. The property taxes in some towns were way out of proportion to the value of the homes. If the buyer was qualified for a mortgage on the home, he could have been disqualified once the property taxes were calculated into the monthly carrying cost.

Some tax increases are, of course, necessary to run schools and services. But, is it fair and logical to tax property and business owners on the entire unrealized gain that is the market value of their property years before they sell?

It sure doesn’t look like the state Legislature is interested in taking care of the problem anytime soon. Bill HJR 353, Assessment of Homestead Property, was exiled to a study committee where it will undoubtedly die a slow death. If you recall, this was the bill intended to amend Save Our Homes, allowing for an increase in the homestead exemption and to permit the partial transfer of homesteaded exemptions to another home. The bill was certainly not a perfect fix, but at least an opening up of discussion in the right direction.

However, the legislature did manage to get some legislation passed and signed by the governor related to waterfront hotels and motels only. The bill gives individual counties the ability to defer property taxes on qualified businesses.

Manatee County commissioners will consider this option, but this represents relief for only a fraction of property owners. As far as I know, the state Legislature has never proposed a bill to alleviate the tax burden on non-homesteaded property owners and other business owners.

Welcome to the flip side of the real estate boom, the price we’re all paying for years of rising home values. If it keeps up, the brides won’t be the only ones running. We’ll send buyers running as well. Then rising home values will be one less thing we’ll have to worry about.

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