SAVE OUR HOMES

Florida home buyers need relief from high property taxes!

This is a statement we've heard far too often in recent years.

In 1992, the state of Florida enacted the Save Our Homes act, for home owners who call Florida their primary residence. Under this act, home owners are able to claim the Homestead Exemption on their property taxes. With this exemption, $25,000 is deducted from the assessed value of a home, before taxes are calculated. And for the entire length of time that a home owner calls a particular home in Florida their primary residence, the taxes on that home cannot be raised more than 3% per year. This act enabled many people to "save their homes" by not losing them to rising Florida real estate taxes, as Florida property values rose. This tax benefit has been a tremendous help for Florida home owners who have stayed in a home for several years.

However, if someone has lived in their home for many years with this exemption in place, and surrounding homes have recently sold, you'll see a drastic difference in the taxes that are being paid from house-to-house. Although, when one of the homes that has been protected by the Save our Homes act is sold, the taxable value of the home is adjusted to the new market value. And Florida home buyers who will be calling this home in Florida their primary residence may apply for the Homestead Exemption. They then can deduct the $25,000 from their assessed value (the price they paid) and their property taxes will not rise more than 3% per year for the entire time they're in the house. But they could still be paying 5 times the amount of property taxes as their next-door neighbor, if that neighbor has been living in their house for the last 20 years. (just an example)

While it's pretty much irrelevant who is paying what, since this exemption is desired for the most part, by everyone who makes Florida their home, and was originally voted into law by an overwhelming majority, it leaves each county in Florida with the problem of not knowing how much revenue they can depend on from the property taxes each year. 

Now let's look at the bigger picture.

• Florida property values have risen drastically
• Florida property taxes will be calculated on these much higher property values, when a home is sold.
• Banks/Lenders have limited the number of programs that are available to many home buyers.
• Florida home owners insurance has skyrocketed due to hurricanes in recent years.
• We're now in a buyer's market and many buyers cannot afford to purchase when you calculate all of these new factors.

So now the population is demanding tax reform. While several options have been placed on the table, our elected officials are unable to come to an agreement on how to fix the problems. 

We must also bear in mind these factors...

• The salaries of our school teachers are dependent on these tax dollars.
  
• The income level for many counties in Florida, is far too low to afford to buy real estate.
• The income level for many counties in Florida, is far too low to even rent, since the property owners are passing these added expenses through to the tenants.

So we'll have to wait and see what turns up on our ballots in the next elections. The only thing that seems almost definite is that the exemption amount will probably be raised to $50,000 instead of $25,000. Everything else could go any direction. The good news is, improvement is almost inevitable! 

I'll post another blog as soon as some of the options are eliminated, as our officials continue to deliberate and try to come up with a solution to this harrowing problem.

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