Property Tax Overhaul Gains Momentum

By: Lilly Rockwell, The News Service of Florida
By: Lilly Rockwell, The News Service of Florida


Out-of-state investors, business owners and first-time homebuyers could pay far less in property taxes under bills gaining momentum in the Florida Legislature.

Supporters say the proposals will help attract home buyers and new businesses, boosting the state’s crippled economy. But critics say they will siphon hundreds of millions of dollars away from local governments and could force higher taxes on owner-occupied homes, while still not addressing flaws in the state’s current property tax system.

“There are thousands of unoccupied homes, beautiful homes, throughout the state of Florida that need a resident,” said Sen. Mike Fasano, R-New Port Richey, a sponsor of the property tax changes. “This is a huge incentive to have people come to Florida and enjoy our beautiful state.”

Fasano said it will also provide tax relief to businesses that are seeing double or triple-digit increases in the value of their property and their taxes.

The changes are included in proposed constitutional amendments (SJR 658, HJR 381) moving in both chambers.

Under the proposals, voters would decide in early 2012 whether to grant owners of investment and commercial property a lower cap on their tax bills through an amendment to the state constitution.

Current law sets the tax ceiling for investors and business owners at 10 percent. The House wants to lower it to 3 percent and the Senate has suggested a 5 percent cap. In both proposals first-time home buyers would also be eligible for an extra tax exemption of 50 percent of the value of their home, not to exceed $200,000.

The proposal represents a second stab at a property tax overhaul in recent years. The Florida Supreme Court threw out a similar proposed constitutional amendment last year for misleading and inaccurate language.

This time around, Florida Realtors lobbyist Trey Price said steps were taken to make the language more precise. For instance, a first-time home buyer is defined as someone who has not claimed a homestead exemption within the last three years. Before, it was unclear how a new homeowner might qualify for that tax cut.

The Florida Realtors are the main proponents of the proposed amendment, saying it will spur interest in home buying.

“We think that offering more protection and predictability for Florida’s investors and business owners is what will keep the state’s economy going,” Price said. He said it’s unfair that investors who want to move to Florida would pay higher taxes on property while they live out of state than current residents. “It’s inequitable,” Price said.

Still, counties and cities remain opposed to the amendment, saying it will result in billions of lost tax revenue. A Senate staff analysis of the proposal says cities and counties could see a $452 million hit on tax revenue just in the 2013-2014 fiscal year alone.

“We don’t believe this goes in the right direction,” said Florida League of Cities lobbyist Amber Hughes. “When you mess with property taxes, when you push down on one segment of the population, it will pop up somewhere else.” Hughes said some counties will face pressure to deliver the same services with less funding and will turn toward millage increases to offset that lost revenue. That means higher taxes for all property owners.

“We have to be careful what we ask for and make sure we don’t have unintended consequences,” said Sen. David Simmons, R-Maitland, who voted for the measure. “Price controls don’t work.”

The tax discounts could be applied retroactively, allowing first-time homebuyers who purchased a house in 2011 to receive the new tax discounts. Other tax changes would go into effect January 2012.

Some lawmakers have questioned why the state isn’t focused on fixing problems with the “Save Our Homes” tax caps. The Save Our Homes law, approved by voters in 1992, caps tax assessment increases at 3 percent per year for owners that receive homestead exemptions because they live in the home.

But over the years, the law has resulted in owners of very similar homes on the same block paying vastly different taxes depending on how long each has lived there. “It has created gross inequities,” said Simmons, who is pushing his own proposal to allow all property owners a 25 percent tax discount.

Meanwhile, the fate of this year’s property tax overhaul is in flux, as the House and Senate now offer differing proposals and negotiations continue between local governments and the Realtors over the right tax cap.

Counties and cities are pushing for a 7 percent cap for investor and business-owned property that would lessen the damage from lost property tax revenue and still provide some tax relief to businesses and investors.

“Right now, we are in negotiations with local governments. They have come out and opposed the bills as currently written. We think they are fair to Florida’s property owners,” Price said.

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  • by Anonymous on Apr 19, 2011 at 06:20 PM
    remember why save our homes was passed?? people were being taxed out of their homes. I paid $25,000 for my home and have lived in it for over 30 years. If it's fair for me to have to pay the same property tax as someone that bought a home in the neighbor hood last week for $210000 then should I have to pay the difference of what i paid and what they paid?? I think that there should be no property tax. Just charge the sales tax on the home or land when it's sold. In this state you never own your home. Just think about it. First the bank owns it with the morgage, then after you get it paid for, the county and the school board owns it. If you dont think so, just dont pay your annual property tax and see if it gets taken away from you. Property tax is the mose unfair tax there is. Why dont we pay our tax on the first $50,000 and then exempt the next $25,000. That way everyone pays something.
  • by RJ on Apr 19, 2011 at 12:51 PM
    Everyone has this wrong. We need to eliminate property taxes and go to a consumption or fair tax. I have yet to understand how property is valued by anyone of our government entities, because there is too much subjectivity involved.
    • reply
      by Cat on Apr 19, 2011 at 01:56 PM in reply to RJ
      RJ, best idea of the day. The way things work now you never really own your home. You may not have a mortgage but you don't own it.
  • by Uwontletmepost on Apr 19, 2011 at 11:03 AM
    Any revision of property taxes should be to maintain fairness to all property owners. Banks and mortgage companies are getting and using benefit of homestead exemption in some locations instead of paying full tax on the foreclosed property. County property assessors are valuing homesteads unequally and the true market value is over $20,000.00 less that the tax appraisial but everyones millage rate went UP to cover the loss of tax revenue.
  • by Thom on Apr 19, 2011 at 10:08 AM
    "Fasano said it will also provide tax relief to businesses that are seeing double or triple-digit increases in the value of their property and their taxes." I thought the problem was that all of these properties were losing so much value and were underwater and unrentable for the cost of the mortgage payment. Which one is it?
  • by Reagan Republican on Apr 19, 2011 at 09:49 AM
    This bill is ridiculous... Everyone should pay the same amount for property taxes and this is exactly why FL is in a mess right now. We cap some people's taxes at 3% of appraised value per year and now we are going to offer low taxes for others. If everyone was charged according to the same percentage amount then it would be FAIR. The taxes should be the stated appraised value of the piece of property times 80 percent.
  • by if Location: nf on Apr 19, 2011 at 08:18 AM
    a first time home buyer--hasn't filed homestead exemption in past 3 years?? why not never filed for homestead exemption first time should mean 1st!!!!
  • by Jonathan Swift Location: Florida on Apr 19, 2011 at 08:10 AM
    Nice! Cut property taxes for wealthy non-Floridians and make actual Florida residents pick up their tab. More class-warfare from our friendly (to the wealthy, only) GOP leadership.
  • by truth Location: fl on Apr 19, 2011 at 07:54 AM
    this is not neeed they have 10% now which they needed this will cause counties and cities to raise their millage rates on every one.if this passes every place with less then 10 mills now could see a tax increase to make up for the loss in revenues again from state.
  • by disgusted on Apr 19, 2011 at 07:34 AM
    Just WHAT is wrong with those crooks in our state legislature??? Now they want to give even more rich people - especially those who don't live here, more breaks!! And they wonder why there's no money for cops, firemen and teachers???
    • reply
      by Anonymous on Apr 19, 2011 at 08:03 AM in reply to disgusted
      Those people you complain about bring jobs and money to our economy. Maybe you need to get off the teet to see through the weeds.
      • reply
        by Incognito on Apr 19, 2011 at 09:50 AM in reply to
        No, Anonymous, all it will do it make the rich richer. Our corp tax is already one of the lowest in the country. What will lowering it more do? Add to their wealth and raise the taxes of us struggling to make a living, to make up the loss in revenue the state receives.
      • reply
        by Thom on Apr 19, 2011 at 10:11 AM in reply to
        We should rely on the market and the natural economic cycle to provide and create sustainable jobs. Someone who needs a tax insentive of generally less than $10,000 a year (to encourage them to buy a house)is not going to create many, if any, permanent jobs.
      • reply
        by still disgusted on Apr 19, 2011 at 12:07 PM in reply to
        Just where are your data to support your statement??? Just how does some rich SOB in NYC who owns a "winter cottage" in Miami bring jobs to this state? Oh, that's right - he hires a few illegals to water and mow his lawn, etc. BTW, I suckle at no teat (learn to spell while you're at it) - I've been an independent businessman for over 25 years ...
        • reply
          by Anonymous on Apr 19, 2011 at 12:48 PM in reply to still disgusted
          You think the snow birds that come down to Florida in the winter don’t spend money?’s TEET, as in sucking from it, something your used to i see. Maybe use a new thing called "THE INTERNET" to look it up OLD MAN.
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