Vol 8 No. 4 - October 17, 2007

A new property tax plan is in the making

By Louise Bolger
sun staff writer

I don’t pretend to have the psychic powers of John Edwards or Edgar Cayce, but something told me back in June that the super exemption tax plan our Florida legislatures were all patting themselves on the back about wasn’t going to happen. It turns out a judge in Tallahassee agreed, calling the proposal that Florida residents were scheduled to vote on in January misleading and sending the lawmakers back to the drawing boards.

Just to refresh your memory; the super exemption allowed homesteaded residents to choose between retaining their current exemption under the Save Our Homes amendment or opt for the super exemption offering a sliding scale of exemptions. Under this proposal most homesteaded homeowners who purchased five years ago or more, would have been better off retaining their Save Our Homes Exemption. Nothing in this proposal allowed for portability of exemptions for homesteaded owners moving from one property in Florida to another. And, nothing was done to reduce the tax burden on non-homesteaded owners or businesses.

Now the Florida Legislature has called a special session to come up with another tax revision plan before the end of October in order to get it on the ballot in January. Gov. Charlie Christ is campaigning for a previous proposal of his to double the homestead exemption to $50,000 and include the portability of current tax exemptions from one home to another. Portability might provide a minor shot in the arm for the real estate market for those homesteaded residents to want to relocate within the state. However, it does nothing for second home buyers and investors that we desperately need back in the Florida market.

Some representatives have floated the idea of reducing property values by 50 percent off the first $500,000 in value, as well as additional percentages off the next $500,000 and beyond. This proposal is based on property values, not on Florida residency. How this would affect current homesteaded residents is still to be determined, but at least it provides for a hint of relief for non-homesteaded owners.

The bottom line is that Florida legislators are in a real bind. In order to get any kind of constitutional amendment passed, it must be voted on by permanent Florida residents, all of whom are homesteaded. Whatever tax plan they come up with has to pass muster with the homesteaded voters and also give tax relief to non-homesteaded property owners. What a mess!

If you’re property taxes are homesteaded, you may want to keep things just the way they are. After all, Save Our Homes has provided a huge tax subsidy to qualified homeowners. But don’t lose site of the big picture. If the voters and legislature of this state don’t get something done, we’ll never get back on a healthy real estate track. Retirement, second home buyers and investors are all watching and waiting to jump back into Florida’s real estate market. Most real estate professionals agree that property values have hit their low point, but until property taxes are revised that may not matter.

The governor and legislature are the ones that have to look into the future and figure out what is fair for every property owner in Florida. They’re going to need the skill of Harry Houdini to undo the chains that bind them, but, after all, that is their job.

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