A Summary of Property Tax Reform Measures to be Considered by Florida Voters on January 29, 2008by Pam Dubov, Chief Deputy Pinellas County Property AppraiserOn January 29th, Florida voters will be asked to vote on a constitutional amendment that will alter Florida's property tax structure in four very different ways. In order to take effect, the amendment must be approved by at least sixty percent of the voters. Each proposed change provides property tax relief to different groups of taxpayers. The four provisions include:
The proposed amendment will increase the current homestead exemption amount of $25,000 to $50,000, but the additional $25,000 will not be exempt from taxes for schools. In addition, the additional exemption will be applied to a property owner's assessed value between $50,001 and $75,000. This means that homeowners who live in homes that have a Save-Our-Homes capped value of $50,000 or less will not receive the additional benefit. This measure will save the typical homestead property owner about $300 per year.
Currently, when a homeowner sells his or her homestead property and purchases a new home, the assessed or capped value of the new home is its market or just value. If the owner has benefitted from the Save-Our-Homes cap for many years on his or her former home, the tax bill on the new homestead can be much higher than the owner's former tax bill because the new bill is based on the full value, rather than a capped value. If the constitutional amendment passes in January, owners of homestead property who currently benefit from the Save Our Homes cap will be able to transfer their existing benefit (up to $500,000) to a new residence within two years of giving up their previous homestead so long as they apply for a homestead exemption on their newly purchased home. The benefit will also be available to those who purchased a new home during 2007 and apply for the homestead exemption for 2008. The legislature has also developed rules to determine how the cap will be moved to a new homestead when the owners of the former homestead divorce, marry, or establish separate residences. The method used to compute the capped value of the new homestead will depend on whether the new residence is more or less valuable than the former homestead. The homeowner and the Property Appraiser's staff, in the county where the new homestead is located, will need three pieces of information to calculate the Save-Our-Homes capped value of the new residence - the former homestead's just (market) value, the former homestead's Save-Our-Homes capped (assessed) value, and the new residence's just (market) value. If the just value of the new homestead is more than the previous home's just value, the appraiser will deduct the dollar value kept off the assessed value of the former homestead from the just or market value of the new homestead.
If the new residence has a lower just value than the former homestead, the percentage of just value kept off the roll due to the Save-Our-Homes cap on the former homestead will be applied to the new homestead's just value to establish its Save-Our-Homes capped or assessed value.
For example: Former More Expensive
Just or Market Value: $300,000 $500,000
Former Less Expensive
Just or Market Value: $300,000 $150,000
Difference in Value as In either case, homestead and other exemptions will then be deducted from the new Save-Our-Homes capped value to arrive at the property's taxable value.
Currently, the Save-Our -Homes value cap applies only to properties used as a primary residence by Florida residents. The proposed ten-percent cap, if approved by votes, will limit future increases in value for non-homestead property such as rental residential, apartments, retail, office, hotel, motel, industrial, warehouse and other property not protected by the Save-Our-Homes cap. While this cap does not provide as much protection as the three-percent limit on homestead property, it will help prevent the dramatic increases in commercial and rental property values in the future if the real estate market experiences double digit inflation in consecutive years, as occurred from 2001 through 2005. This cap will not apply to the taxes for schools.
Most people are familiar with the fact the owners of real estate - land and buildings - pay property taxes. What many people do not realize, is that business owners also pay property taxes on the value of their personal property - things like office furniture, computers, copy machines, and manufacturing equipment, display cases and cash registers. Mobile or manufactured home owners who rent their lots from landlords also pay property taxes on their carports, storage sheds, and utility rooms and other home attachments. The proposed constitutional amendment will create an exemption for the first $25,000 in value for each tangible property owner who files a property tax return with in 2008, and will exempt them from having to file a return in the future unless they purchase additional property that increases their total property value to more than $25,000. This provision will eliminate over 50,000 of the 66,000 personal property accounts in Pinellas County which contribute about one half of one percent of the value to the Pinellas County tax roll. It will also end the practice of requiring thousands of small businesses and manufactured home owners to file an annual tangible personal property return with the property appraiser's office. Whether you agree or disagree with these legislative proposals, you can have a say in how property tax laws are changed in our state. Make sure your opinion counts. Please remember to get out and vote on January 29th.
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