Tax time doesn’t have to be tea time
In case you missed it, last week on tax filing day, April 15, there was a party, a tea party. Although this tea party wasn’t held exclusively in Boston and there wasn’t too much tea being dumped into the Atlantic Ocean, the basic purpose was the same as the one held in 1773 – to demonstrate displeasure with the government.
If you are of the mind that property taxes are too high, you may not need to stock up on tea just yet. In March the Florida Senate and House of Representatives proposed a couple of bills that could help even the property tax playing field and attract potential home buyers to our state.
House Joint Resolution (HJR) 385 is a proposal to limit ad valorem taxes on real property. The term ad valorem comes from Latin and means according to value, therefore, ad valorem taxes on real estate are based on the value of the property. The proposed amendment intends to cap total ad valorem tax on real property to 1.35 percent of the highest taxable value of property or assessed value.
As a companion piece of legislation, the Florida Senate has proposed Joint Resolution S738 further proposing, "An amendment to the state constitution to limit the total aggregate ad valorem taxes levied by counties, municipalities, school districts and special districts on any parcel of real property to 1.35 percent of the highest taxable value of the property."
If these proposals get on the ballot and are voted into law by voters in 2010, no taxing authority would be able to levy a combined tax of more than 1.35 percent of the property’s assessed value.
The other significant bill proposed by the House of Representatives, is House Joint Resolution (HJR ) 97 which proposes, "An amendment of the state constitution to provide first-time homesteaded property owners an additional homestead exemption equal to 50 percent of property’s just value in the first year, limited to $250000." This amount would be reduced each year by 20 percent of the initial exemption in each succeeding year for five years until the assessed value is lower than the just value based on the Save Our Homes benefit.
Sounds confusing, you bet, but when have you ever seen a bill coming out of any government body that isn’t. The bottom line is if these bills ultimately become law, the net result will create a friendlier property tax environment for buyers in the Florida real estate market.
Of course, at this time not everyone in Florida government agrees with the legislation. The fear is the negative dollar impact on local governments that are already experiencing a reduction of revenue based on property values being drastically lower. However, I feel the big picture of stimulating the Florida housing market will ultimately bring more tax dollars to the state and down the road more than compensate local governments.
At the present time, these bills are both in committee, so stay tuned for updates in the media, or you can follow their progress on the House of Representatives Web site, www.myfloridahouse.gov or the Florida Senate Web site, www.flsenate.gov.
The 1773 Boston Tea Party protested the fairness of taxes being levied. The tea party of 2009 protested the extent of government spending. Both tea parties were designed to send a message to taxing and government authorities. I guess things haven’t changed that much in over 200 years. We’re still using tea only now the tea leaves are in bags.