How will the proposed Florida Super Exemption affect investors and second home buyers? This is an important question that is being asked more and more.
On the surface the benefits for owners of non-homestead property are not that great. However, depending on how the law is applied some relief should occur because the proposed amendment would level the assessed values of like-property equally.
Under the current Save Our Homes tax law a condo with a homestead and assessed at $125,000 in 2001 would receive the $25,000 exemption making the accessed value $100,000. Because of the three percent per year cap on the assessment, five years later the tax assessed value would be around $116,000.
A like-condo purchased in 2006 for $325,000 could be assessed at $300,000 based if the condo was a homestead and $325,000 if not a homestead. The assessment is based primarily but not totally on the purchase price. Under the current law we would have like-properties assessed at $112,500 and $300,000. This is just not fair. The politicians in 1992 when Save Our Homes passed had absolutely no foresight.
With the exception of homes grandfathered under the Save Our Homes exemption, the propose amendment would level the assessment equally. All the properties would be assessed the same and only then would the homestead exemption be applied. This is a definite step in the right direction.
One of the complaints myself and others have had is that the proposed amendment does not do enough to help investors and second home owners. These people are so important to our market. The second home owner uses the least amount of services and pays the highest taxes. Let’s not forget these people have rights also.
It seems the legislature of 2007 only has slightly better foresight than their forefathers. Their vision is no farther than the next election.
I campaigned through letters and emails for a tax amendment very close to the one proposed. But I had hoped for a homestead exemption that would have been between 25% and 50% of the first $300,000 and 10% thereafter without a limit. The Super Exemption is 75% of the first $200,000 and 15% of the next $300,000.
With the smaller exemption I favored, residents with homesteads would have reduced their taxes by about 1/3 depending on the percentage. The tax savings on the proposed amendment is much higher especially on the lower end. It's too high.
The legislature in their haste failed to provide a plan that would spread the relief to all property taxpayers. If taxes don’t come under control, the legislature will have “kill the goose that laid the golden egg.”
I’m in favor of grandfathering homesteads under the current Save Our Homes law. Not because I like it but as a necessary evil. The proposed amendment requires a 60% majority. It would be impossible to pass this amendment without the grandfathering provision.
Many people would like to make Save Our Homes portable. I am not certain how that would work but I can tell you I strongly oppose it. I don't want to tax residents out of their homes and that is why I support a homestead exemption that is higher for lower valued homes. But Save Our Homes is blatantly unfair. It's an example of the myopic minds in Tallahassee.
The question Floridians have to decide in January is which is better: the current Save Our Homes law or the Super Exemption. That's an easy decision in my opinion.
However, the proposed amendment is meeting with a lot of resistance. Part of resistance results from the campaign of fear and ignorance being waged by some local government officials and municipal employees. They actually had a business plan that was distributed state wide to local governments on strategies to defeat the proposed amendment. They prey on residences fear of less police, fewer teachers and disappearing services.
Floridians have suffered huge increases in taxes over past several years. I’m still asking where has all the money gone? The truth is local governments are comprised of top heavy salaries and pork barrel projects.
I expect that resistance will lessen because the Super Exemption is far and away the better of the two laws. But, that is no guarantee it will pass. Right now one survey shows only an approval rate of 55 percent which would fall just short of the 60 percent needed.
I plan on attending an information seminar on the legislation. It is important as a realtor and a taxpayer to keep informed. We need to be able to explain the pros and cons of the proposed amendment and encourage Floridians to move forward and vote for approval.
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