Florida Lawmakers Pass a Proposed Constitutional Amendment

Backers claim it cuts Property Taxes by $12.5 Billion over 5 years

Posted November 10, 2007

Responding to skyrocketing coastal property values and taxes, Florida lawmakers on Monday passed a proposed constitutional amendment that backers say would cut local property taxes by $12.5 billion over the next five years.

Summary of the Plan:

• Provides statewide portability up to $500,000 in value for homesteaded Floridians, including school taxes and is retroactive to January 1, 2007.
• Creates a $25,000 tangible personal property tax exemption to businesses.
• Creates an assessment cap of 10 percent for all non-homestead property, but the cap will sunset in 10 years and must be placed on the ballot for reauthorization. This provision does not include school taxes.
• In addition to the current 25,000 homestead exemption, the portion between $50,000-75,000 would be exempt from property taxes-though the school board portion would still be taxed. The average savings for this component is $240 a year.

    After days and days of number crunching and posturing, the Florida House and Senate members agreed to double the state's current $25,000 homestead exemption and allow homeowners to take tax cap benefits with them to a new home when they move. Further, they agreed to expand a popular tax cap by limiting tax increases on commercial property, vacation homes and investment properties to 10 percent a year.

    Since a 1992 referendum dubbed "Save Our Homes," Florida homeowners now enjoy a 3 percent cap on annual local tax increases. But the Senate stripped other House-backed provisions affecting low-income elderly residents, first-time home buyers and waterfront businesses. The omissions prompted many to criticize the plan as a missed opportunity.

    The Senate passed the measure 35-4. The House followed a few hours later on a 97-18 vote after hours of sometimes fiery claims that the final plan did not go far enough. Voters must approve any changes on January 29 when members of both major parties also cast ballots in the state's presidential primaries.

    Citing polls and a requirement that any proposed constitutional amendment must be approved by 60% of voters, leaders said a more comprehensive package of savings would not pass. "Because of the simplicity of this plan, the public has the opportunity to vote for real tax relief ... that will put money in their pockets," said Representative. Dan Webster, Republican of Winter Garden. The plan increases the homestead exemption from $25,000 to $50,000. The additional exemption would not apply to taxes levied by public schools, which are required under another constitutional amendment to reduce class size.

    Moreover, the proposal expands the Save Our Homes measure allowing homeowners to take their accrued savings with them if they purchase a more expensive home. A person who buys a less expensive home will carry a portion of the tax savings with them.

    The tax package is expected to save homeowners,including those in Sarasota, an average of $240 a year, but the portability provision would cost school districts more than $2 billion in lost revenue over the next five years. The hit to schools was a rallying point for many who said the taxpayer benefits did not justify the cuts to education.  Another proposal to eliminate property taxes for low income seniors was also jettisoned. "This is not even close to being good enough," said House Democratic Leader Dan Gelber of Miami Beach."

      For a permanent home, vacation getaway or an investment property, the Sarasota real estate market, with its recent price correction, is hard to beat.  I invite you to request my free Sarasota Real Estate Package or call me directly at 941-228-2321 or toll-free at my Sarasota RE/MAX Office at 800-966-2334.