Sunday, October 21, 2007

Newest property tax proposal

I just got this message from FAR. This seems like a more comprehensive solution that originally put forward. I think it's a good idea to limit commercial property. The difference between the 3% cap and the 5% cap still leads to an exponential function which will increase prices for non-homesteaded property but at a much slower pace.

Dear Florida Realtors:For over a year now you have been advocating for property tax reform that is comprehensive and not just a simple tax cut. Your message has been clearly delivered to the legislature that reform needs to address all property types - not just Homestead property owners.
This afternoon The Florida House of Representatives released a revised property tax relief proposal that will be considered on Monday. This plan includes provisions advocated by both Republicans and Democrats in the House.
In addition to Portability which is being embraced by the Governor, Senate and House, this new House proposal includes a five percent assessment cap on Commercial and non-homestead property. This is intended to provide the predictability and stability that non-homestead property owners have been advocating for. The House is also advocating a new homestead exemption that, instead of doubling the current $25,000 exemption, would guarantee a minimum Save Our Homes exemption of 40% of the county median home value. House leaders believe this will provide relief to not only new buyers but those who have purchased in recent years.
Again, we expect the House to begin consideration of this proposal on Monday. Both the House and Senate plans that are being considered maintain the current Save Our Homes structure and provide for portability of Save Our Homes.
Attached is a side-by-side that gives more detail on the current Senate and House proposals.
Here is a complete list of the issues being proposed in the House plan today:
Instead of doubling the homestead exemption, this exemption is tied to the county's median home value and will target relief to all homestead property owners (not just first time buyers). Again, the exemption would be 40% of area median.
Save Our Homes-like cap on non-homestead and commercial property to help restore fairness, equity and predictability to our property tax system by capping any increase at 5%. This will help businesses who have faced outrageous tax increases and owners of second homes (Snowbirds).
Portability - homeowners may transfer their Save Our Homes benefits to a new homestead anywhere in Florida within 2 years of leaving their former homestead.
Creates a new Tangible Personal Property Exemption of $25,000
Limits the authority of local governments to increase property taxes
Provides for limitations on assessed values of properties used for affordable housing
Provides an assessment growth limitation for all non-homestead properties in Florida by 5%
Creates more flexibility for the Legislature to limit assessments for working waterfront properties
Election of all county property appraisers
We will continue to update you on negotiations.
Nancy Riley
2007 FAR President

Senate Proposal
House Proposal


Provides for statewide portability of Save Our Homes differential. Can "port" full amount if "upsizing" but pro-rata share if "downsizing". $1 million cap on amount to be ported. Not applicable to school taxes.


Federal constitutional right to travel issues still of concern, although ameliorated by Senate's new first-time homebuyer exemption and House's 40% of median home price exemption.

Retroactive to provide relief to those moving in 2007.

Homestead Exemption

Double the exemption from $25,000 to $50,000. Apply to third $25,000 (i.e., exempt $1-25,000; tax $25,000 to $50,000; exempt $50,000 to $75,000). Not applicable to school taxes.

Provide new homestead exemption equal to 40% of median just value of homestead property in county. Exemption applies after first $50,000 of just value of homestead. Homeowner gets only larger benefit of new 40% exemption or SOH differential. Not applicable to school taxes.

Most costly component of Senate package ($3.5 billion over 5 years) that provides relief to many high-end homeowners who already enjoy significant SOH savings. Applying to third $25,000 will provide some relief for poorer, rural counties. No indexing.
House proposal would better target tax relief to homeowners in need and either have less fiscal impact on government or result in less redistribution of tax burden onto non-homestead properties.

First-Time Homebuyer

Additional homestead exemption for persons buying first home in state. Amount is 25% of median value of home in the county. Not applicable to school taxes.

New homestead of 40% of median homestead just value in county applies instead.

Both Senate and House proposals apply to first-time homesteaders in Florida, regardless of whether owned home elsewhere.

Assessment Limit

Save Our Homes cap of lesser or 3% or CPI maintained for homestead property.


Non-Homestead Assessment Limit


Limits annual increase in assessments on non-homestead real property at 5%. Non-homestead residential properties of 9 units or less reset upon sale; assessment cap remains with property for all other non-homestead real property.
Additions to property assessed as provided by general law.

Will limit increases in assessments in single year to rate more in line with long-term historical growth rates, and increase predictability of taxes. Will help limit redistribution of tax burden onto non-homestead property.

Tangible Personal Property Exemption

Exempts tangible personal property at $25,000 per person per county.


No indexing. Maximum exemption set in constitution is $25,000.

Property Tax Cap

Statutory caps adopted in prior special session remain in place. Additionally, new cap prevents property tax rates in 2008-09 from automatically increasing to offset tax base reductions.


Local governments cannot increase rates to offset base reductions without an extraordinary voter: 2/3 vote to restore 2/3 of taxes lost to base reductions; unanimous vote to restore more than 2/3.

Affordable Housing

Authorizes assessment of government rent-restricted affordable housing based upon actual rents rather than highest and best use of property. Not applicable to school taxes.


Detailed implementing legislation proposed.

Working Waterfront

Authorizes application of special assessment rules to property used exclusively for commercial fishing or property open to the public and used predominantly for water-dependent purposes or public access to the water. Not applicable to school taxes.


Implementing legislation would await regular session.

Low Income

$100,000 property tax exemption for low income seniors. Applies to those 65 or older with household income of $23,604 or less. Indexed for inflation. Applies to school taxes.

Additional homestead exemption equal to 100% of the median just value of homestead property in the county. Indexed to inflation.

Concerns have been expressed by Senators regarding the value of $100,000 exemption in South Florida versus rest of state.

Local Revenue Cap



Included in Governor's proposal, but not in legislative proposals.

Replacement of Property Taxes



Buy-down language doesn't guarantee that sales tax dollars will not just become cumulative. There is no mechanism in legislation to benchmark school millage and adjust it according to sales tax revenues. Start date and existing contract issues would need to be addressed.

Special Districts

Tax base reductions apply. Tax caps apply.


Amendments to protect special districts providing fire, ems, and hospital services were either withdrawn or failed. Amendment to cap special assessments at 5% was withdrawn in Senate.

Presumption of Correctness/Burden of Proof

Property appraiser would lose the presumption of correctness for those non-homestead parcels where the increase in value exceeds the average increase for other properties within the county in the same category of property.


Version in Senate bill is not ideal. Categories are defined by law and manufacturing, electric, telecom, cable, and other tangible personal property would be excluded from benefits of level playing field. This is a statutory provision. Atwater floor amendment (#831234--withdrawn) contained preferred language.

Elected Property Appraiser

Requires all property appraisers be popularly-elected.

Miami-Dade County is only one county with appointed property appraiser.

Compiled: October 19, 2007, by Vicki Weber, Hopping Green & Sams, P.A.

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