Florida Property Tax Relief Update

Well, the Florida Legislature passed a very contentious property tax cutting amendment yesterday (6/14) - with many tax payers up in arms over its effect. The second portion of the bill - which does not require voter approval - is to require local governments to reduce and cap taxes with allowances for new construction and growth in personal income. In order for a local government to override the caps it would take a super majority council vote or a local citizen referendum.

Essentially, all local governments will need to trim their budgets from 3% to 9%. Many local officials feel they would have no choice but to cut local services to their population including fire and rescue personnel. And, perhaps more importantly, the proposed tax law changes could take as much $7B out of the coffers for education. The legislators' comments were that they promised they would deal with this issue in the future.

The other part of the bill which directly affects homeowners, and would be on the ballot on the January 29th presidential primary - as opposed to the next general election in 2008 - is a choice to take a "super" exemption or to stay with the Save Our Homes legislation.

There is much made about disparate property values on the same street with little explanation offered to the public as to why. It's really simple. When a home sells for an increased value that amount is reported to the tax assessor's office and the following year the home is re-assessed at the value based on its sales price - now this is pretty standard in most taxing districts. If you are eligible to homestead your property (requires being a Florida resident), the exemption is granted and the Save Our Homes cap is applied. This protects your home from rapidly rising real estate taxes in an increasing real estate market.

It looks to us like the Florida legislature passed another boondoggle similar to those allowing national insurance companies to form Florida only subsidiaries and limiting classroom size without first building the schools to accommodate our rising student populations. Only time will tell.

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