Well it finally went through. The legislature has approved the tax cuts and it will be up to the voters in January. I will be very surprised if it doesn't pass despite likely lobbying from the various unions.
One nice feature that didn't look like it would make it is the option for people to stay under the Save Our Homes plan. If you'll look to one of my last posts, that was a major concern for owners of more expensive property. As Save Our Homes moves out of the picture, the tax situation will return to a more normal position. Eventually, this will restore a balance between non-homesteaded and homesteaded properties. Of course, homesteaded property will always have savings but it will now be more in line with an appropriate figure.
Lawmakers cut property taxes, more may come - 06/15/2007 - MiamiHerald.com
Friday, June 15, 2007
Thursday, June 14, 2007
Latest Update from Rep. Carl Domino
I just received this e-mail from Rep Domino. I think he raises some very valid points. Several are the same as my comments in the last blog entry even. While I agree with him that this bill leaves some major gaps, it does seem to move in the right direction. It will alleviate some of the pressure that SOH is putting on non-homesteaded property. While not perfect it could be a step in the right direction.
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SAVE OUR HOMES UPDATE!
In a few hours we will commence to debate a Constitutional Amendment which will repeal Save Our Homes.
This protection for our citizens will be replaced by a higher homestead exemption for homesteaded residents. It does NOT address second homes or commercial property. If passed in both Houses, it will be put before the voters (probably in January) and will need 60% approval. While it grandfathers those who currently would be better served by portability (22% of residents) it does NOT allow for portability.
I have shared with leadership my opposition to this legislation!
* With a weak real estate market we need portability.
* This Bill affords little protection to South Florida residents since their homestead will be valued higher than the $200,000 levels for the largest tax break.
* Benefits would not be received for several years.
* Exclusion from SOH benefits would not be your option. If you are $1 under the cut point you will not qualify.
* Under SOH your assessment could not increase more than 3%. With this bill your assessment could move upward in an unlimited
amount. In some instances that could result in 10-15% tax increase
in one year.
* High end buyers, while protected for a short time, might pay
thousands of dollars more in taxes if they stayed in their home for a number of years.
* Realtors will be particularly hurt by this bill.
Later today, I will offer amendments to provide portability and save Save Our Homes. Contact your Representatives and House leadership urging them to vote for these amendments.
Carl J. Domino
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SAVE OUR HOMES UPDATE!
In a few hours we will commence to debate a Constitutional Amendment which will repeal Save Our Homes.
This protection for our citizens will be replaced by a higher homestead exemption for homesteaded residents. It does NOT address second homes or commercial property. If passed in both Houses, it will be put before the voters (probably in January) and will need 60% approval. While it grandfathers those who currently would be better served by portability (22% of residents) it does NOT allow for portability.
I have shared with leadership my opposition to this legislation!
* With a weak real estate market we need portability.
* This Bill affords little protection to South Florida residents since their homestead will be valued higher than the $200,000 levels for the largest tax break.
* Benefits would not be received for several years.
* Exclusion from SOH benefits would not be your option. If you are $1 under the cut point you will not qualify.
* Under SOH your assessment could not increase more than 3%. With this bill your assessment could move upward in an unlimited
amount. In some instances that could result in 10-15% tax increase
in one year.
* High end buyers, while protected for a short time, might pay
thousands of dollars more in taxes if they stayed in their home for a number of years.
* Realtors will be particularly hurt by this bill.
Later today, I will offer amendments to provide portability and save Save Our Homes. Contact your Representatives and House leadership urging them to vote for these amendments.
Carl J. Domino
Tuesday, June 12, 2007
Save our homes article
This article came out today and discusses some of the progress regarding changes to the tax issues. This new proposal sounds like progress. To summarize, 25% of the first $200,000 will be taxed and 85% of the next $300,000. So, if someone has a house that is worth $250,000 (roughly our median price), they will be taxed at:
$200,000 x 25% = $50,000
$ 50,000 x 85% = $42,500
$50,000 + $42,500 = $92,500
At a 20 mils rate, that would equate to $1,850 in tax. That is almost certainly lower than the Save Our Homes rate. The same house with a $25,000 homestead exemption today would be $4,500 if you were to buy it new.
There are some advantages and some disadvantages with this scheme. The advantages are:
1. It will make everyone more equal than under the SOH plan which will currently have people paying dramatically different prices based on how long they have been protected.
2. It will not penalize someone who is trying to move into a community or moving from one home to another.
There are also some disadvantages:
1. Higher priced homes will be paying dramatically more than they currently are. One example of a riverfront home owned by people who have been there since 1983 would have the owner's taxes change from taxable value of $435,000 to taxable value of $1,100,000. That means a change at 20 mils from $8,700 to $22,100!
2. It still does not address the investment (rental) property. Owners of those properties will still pay a disproportionate share. That cost will be passed on to our renters.
3. It does not address commercial property. Our businesses are being so heavily taxed now that they are reducing costs.
These disadvantages are severe. These issues must be addressed in order for the plan to succeed. However, the advantages are strong enough that this plan is a benefit to our State. Two proposals which are being discussed would benefit the plan:
1. Allow property owners to maintain Save our Homes benefits at their option. This will protect people who are living in more expensive homes who have had the promise of lower taxes from the State.
2. We should extend some benefits to non-homesteaded properties. While there is a focus on homesteaded properties, we need to consider our economic engine. Vacation homeowners, companies, and renters need protection as well.
Front page news - newsjournalonline.com
$200,000 x 25% = $50,000
$ 50,000 x 85% = $42,500
$50,000 + $42,500 = $92,500
At a 20 mils rate, that would equate to $1,850 in tax. That is almost certainly lower than the Save Our Homes rate. The same house with a $25,000 homestead exemption today would be $4,500 if you were to buy it new.
There are some advantages and some disadvantages with this scheme. The advantages are:
1. It will make everyone more equal than under the SOH plan which will currently have people paying dramatically different prices based on how long they have been protected.
2. It will not penalize someone who is trying to move into a community or moving from one home to another.
There are also some disadvantages:
1. Higher priced homes will be paying dramatically more than they currently are. One example of a riverfront home owned by people who have been there since 1983 would have the owner's taxes change from taxable value of $435,000 to taxable value of $1,100,000. That means a change at 20 mils from $8,700 to $22,100!
2. It still does not address the investment (rental) property. Owners of those properties will still pay a disproportionate share. That cost will be passed on to our renters.
3. It does not address commercial property. Our businesses are being so heavily taxed now that they are reducing costs.
These disadvantages are severe. These issues must be addressed in order for the plan to succeed. However, the advantages are strong enough that this plan is a benefit to our State. Two proposals which are being discussed would benefit the plan:
1. Allow property owners to maintain Save our Homes benefits at their option. This will protect people who are living in more expensive homes who have had the promise of lower taxes from the State.
2. We should extend some benefits to non-homesteaded properties. While there is a focus on homesteaded properties, we need to consider our economic engine. Vacation homeowners, companies, and renters need protection as well.
Front page news - newsjournalonline.com
Monday, June 11, 2007
Quick update
I just received this correction to Rep. Domino's earlier message:
Since writing our last update, we have been informed that the Legislature scheduled a General Election for the Party Primary, on January 29th, 2008. Accordingly 75% will not be required to get the Constitutional measure on the ballot.
In today’s Property Tax joint meeting, the possibility of portability being put on the bill was raised. During the next two weeks, we will keep you informed in a timely manner on the Special Session.
Carl J. Domino
Since writing our last update, we have been informed that the Legislature scheduled a General Election for the Party Primary, on January 29th, 2008. Accordingly 75% will not be required to get the Constitutional measure on the ballot.
In today’s Property Tax joint meeting, the possibility of portability being put on the bill was raised. During the next two weeks, we will keep you informed in a timely manner on the Special Session.
Carl J. Domino
Update from Carl Domino regarding tax changes
The letter below was sent to me via e-mail from Rep. Carl Domino who is in favor of the portability issues regarding save our homes. Realistically, the solution that has been proposed has several drawbacks. It is a step in the right direction because it has the potential of ending the current cap issues. The current solution provides for exponential cost savings every year for homesteaded properties. This new solution is (to some extent) a linear cost savings. In other words, we aren't getting as far out of whack. However, it still allows homeowners to opt to remain under the old system and, more importantly, does not address the problems associated with non-homesteaded properties. Renters and employers will bear the largest burden under the new scheme. The good news is that that burden will begin to be less proportional.
Letter from the Representative:
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SAVE OUR HOMES UPDATE!
Finally after a 4 year battle we are beginning to see a consensus growing
around property tax relief. While we do not have details much of the proposal provides meaningful and responsible tax relief. This week in Tallahassee we will iron out details and work hard to ensure that taxes will remain affordable.
The plan has two parts:
1. A rollback on millage rates - this is legislation which can be passed in our special session. It will result in reduced tax bills for all property owners in the state. This reduction should be reflected in this year's tax bill. Additionally, and equally important, the growth in future tax revenues will be restricted.
2. Constitutional change. The Legislature will vote on a change in the Constitution, which will substitute a progressive property tax system for the current protection of Save Our Homes. It is projected that about 70% of individuals will pay lower taxes under this system. The remaining people can elect to retain Save Our Homes.
This proposal has to receive support from 60% of legislators in the special session. To get it on the ballot in January 2008, it needs approval of 75% of the members of each house of the legislature. Then it will need approval of 60% of the electorate. The change in tax bills will be reflected two years from now.
Unfortunately, neither portability nor elimination of the "best and highest"
use for appraisals will be included. Without portability 30% of homesteaded property owners will face a significant tax increase if they choose to sell their property and purchase a home of equal or higher value. This further devastates the dreams of many Floridians who wish to move.
Since it is a progressive tax scheme, it will be the higher end home owner
who will elect not to move - costing real estate agents important commission revenues.
We will continue to fight for portability and invite your continued input and your thoughts on the proposals.
Carl J. Domino
Letter from the Representative:
------------------------------------------------------------------
SAVE OUR HOMES UPDATE!
Finally after a 4 year battle we are beginning to see a consensus growing
around property tax relief. While we do not have details much of the proposal provides meaningful and responsible tax relief. This week in Tallahassee we will iron out details and work hard to ensure that taxes will remain affordable.
The plan has two parts:
1. A rollback on millage rates - this is legislation which can be passed in our special session. It will result in reduced tax bills for all property owners in the state. This reduction should be reflected in this year's tax bill. Additionally, and equally important, the growth in future tax revenues will be restricted.
2. Constitutional change. The Legislature will vote on a change in the Constitution, which will substitute a progressive property tax system for the current protection of Save Our Homes. It is projected that about 70% of individuals will pay lower taxes under this system. The remaining people can elect to retain Save Our Homes.
This proposal has to receive support from 60% of legislators in the special session. To get it on the ballot in January 2008, it needs approval of 75% of the members of each house of the legislature. Then it will need approval of 60% of the electorate. The change in tax bills will be reflected two years from now.
Unfortunately, neither portability nor elimination of the "best and highest"
use for appraisals will be included. Without portability 30% of homesteaded property owners will face a significant tax increase if they choose to sell their property and purchase a home of equal or higher value. This further devastates the dreams of many Floridians who wish to move.
Since it is a progressive tax scheme, it will be the higher end home owner
who will elect not to move - costing real estate agents important commission revenues.
We will continue to fight for portability and invite your continued input and your thoughts on the proposals.
Carl J. Domino
Monday, May 28, 2007
Old Florida enclave is new Florida hot spot - 05/23/2007 - MiamiHerald.com
Very well done article. It complements Flagler County in many ways.
Old Florida enclave is new Florida hot spot - 05/23/2007 - MiamiHerald.com
Old Florida enclave is new Florida hot spot - 05/23/2007 - MiamiHerald.com
Tuesday, May 22, 2007
New plan being proposed
Front page news - newsjournalonline.com
This article sounds much more like the solution that was proposed by Morgan Gilreath. It seams encouraging that they are looking at other solutions. It doesn't seem to address the issue of non-homesteaded property. I'm not certain if these exemptions would apply there or not. It also seems to allow for people with SOH benefits in place to continue which may be troublesome. That could cause additional tax burdens and increase the tax issue for non-homesteaded businesses and for non-homesteaded renters.
At the same time, moving to a completely percentage based solution without considering the SOH people could have a dramatic negative impact on those who have been in the same home since 1992 when their property value was locked in.
One potential solution is to allow that benefit to continue, offer a 20% exemption as an alternative across the board. As people move out of, or heir, their SOH properties, they would fall under the new plan. As more and more people come off of the SOH plan, the percentage exemption could be increased with the goal of keeping taxable value in line with the property value changes. While I haven't examined the 20% figure, Morgan Gilreath used a figure of 62% of taxable value to equal today's SOH exemption (see an earlier article) which would be a 38% exemption. If that is accurate, the 20% figure is roughly half the savings to begin with. However, many homeowners would benefit greatly from that type of reduction. As would renters and business owners, the segment of the market that we are currently attacking.
This article sounds much more like the solution that was proposed by Morgan Gilreath. It seams encouraging that they are looking at other solutions. It doesn't seem to address the issue of non-homesteaded property. I'm not certain if these exemptions would apply there or not. It also seems to allow for people with SOH benefits in place to continue which may be troublesome. That could cause additional tax burdens and increase the tax issue for non-homesteaded businesses and for non-homesteaded renters.
At the same time, moving to a completely percentage based solution without considering the SOH people could have a dramatic negative impact on those who have been in the same home since 1992 when their property value was locked in.
One potential solution is to allow that benefit to continue, offer a 20% exemption as an alternative across the board. As people move out of, or heir, their SOH properties, they would fall under the new plan. As more and more people come off of the SOH plan, the percentage exemption could be increased with the goal of keeping taxable value in line with the property value changes. While I haven't examined the 20% figure, Morgan Gilreath used a figure of 62% of taxable value to equal today's SOH exemption (see an earlier article) which would be a 38% exemption. If that is accurate, the 20% figure is roughly half the savings to begin with. However, many homeowners would benefit greatly from that type of reduction. As would renters and business owners, the segment of the market that we are currently attacking.
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