Proposed Super Homestead Exemption

Here is a follow up article that was written to the meeting we held at our board on Tuesday September 25th as written the Citrus County Chronicle: Latest update: Thursday, Sep 27, 2007 - 10:39:25 pm EDT Realtors explain legislation, bring clarity to property tax laws By Chris Van Ormer Homeowners under stress from the sharp increase in property taxes may have a struggle reading through new state legislation aimed at offering some relief. And currently, a Leon County circuit judge has ruled that the proposed property tax constitutional amendment is misleading, and he removed it from the Jan. 29 ballot. Even though the effort is temporarily tabled, the Citrus County Realtors Association hosted a tax reform education session Tuesday to explain how a Super Homestead Exemption would work to the benefit of all homeowners, mobile homeowners, small business owners and low-income seniors. While lawmakers are reviewing their options to get the amendment back on the January ballot, the public has time to review the measures. Leading the discussion was John Sebree, vice president of public policy with the Florida Association of Realtors (FAR). Citrus County is one of the stops on his tour throughout the state to explain this legislation. About 60 homeowners attended to learn about this tax reform. Sebree said he had worked on this plan for three and a half years. It came about from Realtors who told of people having to stay in their homes because of the rising property taxes and because by moving they could lose their Save Our Homes 3-percent tax cap. “Total property tax levies have increased by 99 percent between fiscal years 2000 and 2007,” Sebree said. “This leaves people locked into their homes.” Homeowners hardest hit are snowbirds with second homes in Florida, investment property owners and recent purchasers of houses. “Only homesteaded owners are not complaining so much because of the tax cap,” Sebree said. While many homeowners saw their property values double, income lagged behind. Personal income for Florida families has increased an average of 4.2 percent each year for the past 10 years, Sebree said. “How can people pay property taxes at the current rate when personal income didn’t increase at the same rate?” Sebree asked. The discrepancy is an unforeseen consequence of the Save Our Homes cap. It was added to the Florida Constitution in 1992, and it had what voters believed was a valid purpose at the time, according to Sebree. But it created huge inequities among taxpayers. One homeowner can pay vastly different taxes from an identical neighbor. If passed, the Super Homestead Exemption amendment would offer voters a choice of continuing their Save Our Homes protection if they have homesteaded their property, or choosing a new super-homesteaded property. With the new system, Sebree explained, 75 percent of the first $200,000 of a home’s value and 15 percent of the next $300,000 would be tax exempt, to a maximum of $195,000. Sebree pointed out how this system would benefit the workforce community of police, firefighters, nurses and teachers. “There is not one metropolitan area in the state of Florida where a teacher can afford a median-priced home,” Sebree said. According to the FAR, the median price of an existing home in Florida was $237,000 in May 2007. Under the Super Homestead Exemption, a median-priced homeowner would receive $155,550 in exemption. Current homeowners would be given a choice about how they wanted to be taxed: They can stay with Save Our Homes or adopt the new Super Homestead system. But transferring a homestead or moving would put the owner in the Super Homestead exemption. To help homeowners decide which system would be best for them, Citrus County Property Appraiser Melanie Hensley said her Web site has a property tax calculator for comparing both tax methods. Homeowners should go to www.pa.citrus.fl.us to use the calculator, which requires figures from the TRIM notice. The FAR also has a property tax calculator on its Web site at www.floridarealtors.org. Sebree said that mobile homeowners and small business owners also would benefit from the legislation. “The second major piece of this constitutional amendment is the $25,000 tangible personal property tax exemption. It’s estimated that of the 1.3 million small businesses in the state of Florida, 1 million of those owners will not have to file this tangible personal property tax ever again. This saves the average small business owner somewhere between $250 and $500 a year,” Sebree said. The $25,000 tangible personal property tax exemption also affects mobile homeowners, Sebree said. For their taxes, mobile homeowners pay an annual registration fee to the Department of Motor Vehicles. Then they are assessed for a tangible tax bill for other additions to their property by the county property appraiser. Under the legislation, they would not have to pay taxes for property assessed at up to $25,000. Offering something for all, the amendment also would help low-income seniors, Sebree said. “There are additional changes that the constitutional amendment provides for, and the biggest one of those is increasing the homestead exemption for low-income seniors to $100,000. These are seniors in the state of Florida who make less than $24,500 a year. Their minimum homestead exemption would be $100,000. Say, for example, a low-income senior buys a $110,000-condominium. They would pay tax on $10,000,” Sebree explained. Getting the amendment back on the Jan. 29 ballot is an additional challenge for the FAR, Sebree said, and he urged everyone to vote for it if it is on the ballot for the primary election. “You can still go vote that day, even if you are not a registered Democrat or Republican,” he said. “You can vote on the amendment.” For questions and answers about tax legislation, see page 7A of Friday's Chronicle.