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Florida Tax Reform for non-homesteaded properties

We are reading all kinds of articles about the proposed Florida Tax Reforms. Because a lot of our customers are absentee owners, second home owners and commercial property owners they keep contacting us about how the proposed tax reform will impact them.

Rick and I decided to write a post only on the changes proposed for these owners, since they have called us and requested more information from our Miamism blog. The post is called Property Tax reform for 2nd home owners and commercial properties. These are the changes that will definitely take place and will give these owners a better idea in order to budget their expenses.

The Florida Tax Reform Proposal for non-homesteaded properties is:

Just like homesteaded properties, effective 2007-2008 budget year, cities and counties will have to rollback taxes to the 2006-2007 levels.

All properties, which include non-homesteaded properties and commercial properties, will get a modest 7% tax cut (approximately) at the expense of local governments.

Moving forward, the property taxes will be capped at a rate that does not exceed the growth of personal income and population growth. Just as a bench mark, personal income has grown at a rate of approximately 4%.

I have to admit that we expected more and there was talk about rolling these back to 2003-2004 levels. It is disappointing for a lot of us, but at least these 2nd home and commercial property owners will know what to expect with regards to their tax increase every year.

Posted by Rick & Ines - Miami Beach Real Estate on 06/22/2007 11:08 AM

Comments (16)

commercial real estate, florida, project blogger

Originally posted at: Miami Real Estate Blog: Florida Tax Reform for non-homesteaded properties

16 Comments on Florida Tax Reform for non-homesteaded properties

JUN

2007

Ines, I am not sure I fully understand what all this means and the impact that it will have, but it seems that it is at least a small step in a positive direction, or am I understanding it wrong.

George - I think when it comes to non-homesteaded properties, the proposed changes are definitely an improvemeent, although I expected more. We manage commercial properties and some have experienced 20% increases in taxes which is absurd. Any 2nd home buyer or commercial property investor will think twice about buying properties when there is to cap to the taxes, now there will be.

Is it just me or are you guys sick of these SUPPOSED tax breaks? In Volusia county, they would never tell us the actual formula they used for calculating taxes, so we (Realtors) had to go through the tax rolls and figure it out for ourselves, just so we could estimate future taxes for our buyers, since Florida pays taxes in arrears. (And for the record, the formula is not something that is determined by voters.) Then in 2006, they changed the formula with no warning to the public, while at the same time, making a big deal about lowering the millage rate. They lowered the millage rate by about 2 points, but with the formula change, the taxes INCREASED by at least 25%! And now they're saying that in 2008 they're going to roll back the taxes to 2006-2007. Sounds pretty suspicious to me. If they were really offering a break, they'd roll them back to before the big cover-up happened.

Lisa - and to make matters worse, they are now saying that reducing taxes would take money away from education. Personally, I think if a major tax reduction is achieved, people would be better off paying for private schools. There's always an excuse.

I'm feeling all taxed out up here. It seems to never end!

Monika - that's the truth!

THIS is a GREAT post! Us Floridians are hoping for more 2002-2003 levels would be great. Keep us posted. ~Great short post!

the tax plan is a great start and is geared toward the voting floridians. what a surprise! but shouldn't it start there? i think yes.

Rick & Ines, I keep trying to figure out what rolling taxes back to the 2006-2007 taxes mean? We're in the 2007 tax season, so how much can they roll back? Like $1.50? Its all a big joke. While they pander to the voters, county workers are losing their jobs, schools are getting budget cuts, towns are going to cut services, and on and on. For what? A crummy $174 break? I hope everyone votes a resounding NO on the referendum in January. Then we can see them scramble to try and figure out where the mutiny came from. Until they can tell us the long term effects/benefits of raising the homestead exemption, we should say hell NO!

Terry Haugen - STAGE it RIGHT!

Katrina - I think that's exactly the problem, we are hoping for more, but not getting it.

Jay - the problem with the "voting floridians" is that the plan is not very clear and most people will think - thank reform, yes! I just grabbed one of the tax calculators and according to the new proposal, my taxes would increase 115% - that's INSANE! I hope all floridians educate themselves before voting in January.

Terry - I think the roll-back is due to them stalling the issue, and since the proposal will be taken into effect next year, they want to at least give people the benefit of the time it took them to make the decision. I totally agree with you about the homestead proposal....it's so complicated that most people won't take the time to study it. It's a big SCAM.....like most things that happen here.

But one thing is true, we are seeing a positive move towards non-homesteaded properties, and that was the whole idea of this post.

Ines - I agree - we needed something for the investor and 2nd home / vacation home owners. I hope this helps since many tell us they are considering leaving the state. Great post!

JUN

2007

Cyndee - where are you going?

JUN

2007

Looks like fun, we had my daughters 7th birthday party planned about 3 months ago.... Next time!

Katrina - I'm sure you had fun with the birthday parties....it will be next time.

DEC

2007

I can't believe the waste of tax money in this state and this country. The perks that polliticians get for such a short tenure is obscene. The pension structure for state, federal and local government employeees are also out of line. Continual bleeding of the latter and giving foreign competition unfair advantage of our import laws are helping sinnk this country into huge problems in the very near future (3 years I would say). I won't even mention the illegal alien problems we have in this state alone. We need a strong state government that is willing to do something drastic to protect all of us. That's is why I am voting out all the incumbants. HAPPY NEW NEW!

Harvey - thanks so much for your comment and I do agree that we plenty of problems in Florida (and other states as well). All the issues you mention are definitely important and need to be addressed as so should the real estate taxes for second home owners and commercial property owners. How are we to encourage second home owners and commercial investors to come into our state if we have nothing to offer them?

One example I can mention is Europeans who are having doubts about investing money in Florida now because of the tax situation and because there is no cap and nothing to protect them. Something needs to be done, and quickly! Thanks for your comment!

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