How Does the Proposed Tax Reform Help Commercial Properties?

Real Estate Broker/Owner with EWM

 Florida Proposed Property Tax Changes 

 Your probably wondering with all the talk and media campaigns on the proposed tax reform, how or does it contain anything that will help commercial properties?  I hope your sitting down when you read this because it is shocker. The legislature is actually proposing something that will help commercial properties.Granted they are not sweeping changes, but every little bit helps.

On January 29th, voters will have the opportunity to vote for property tax reform - otherwise known as the "super homestead exemption" - but does the proposal benefit commercial properties

"Benefits for Commercial Properties"

The most important benefit commercial owners will get is from the "growth in per capita Florida personal income" cap.  This means that for the first time in Florida's history, property taxes for all properties cannot be increased by more than the annual increase of Florida's personal income, which has been 4% traditionally.  At last, commercial property owners will know the maximum increase for future property taxes and commercial Realtors® will be able to provide more accurate income and expense analysis and projections to their clients.    

Should you vote "YES" in January?  -  If you have an interest in commercial properties you should vote "yes" for the constitutional amendment because incorporated into the "super homestead exemption" are the following benefits for commercial properties:

  It would begin to "unwind" the disparity between residential homestead and commercial properties, created by "Save our Homes". 

 It includes a personal property tax exemption up to $25,000 on business equipment, including shelving, computers, fax machines, etc., which is a huge savings for small business owners.  Florida Association of Realtors® website states, "Sources estimate that 1 million of Florida's 1.3 million businesses will be completely exempt from this local tax.  While the annual dollar savings average $500 per year for each business, the exemption also eliminates the annual filing requirement for those exempt."

  It also grants authority to the legislature to reduce the taxable value of working waterfront property and affordable housing properties by allowing assessments based on a classified use.   By grouping these properties into a different class structure, it could save owners  thousands of dollars.


Comments (5)

James R. Venney
Gibraltar Private Bank & Trust - Coral Gables, FL


This is valuable bit of information.  In your opinion does the property tax reform have a chance of passing given the fact that the vast majority of Florida residents do not have a clear understanding of what the legislation contains.  Has FAR publicly supported the current version of the bill and if so will there be a public awareness campaign?

Aug 17, 2007 11:54 AM
Debra Spadafora
EWM - Pinecrest, FL

James - Not sure if it will pass however, FAR in their communication to the FAR Directors have dedicated $1 li dollars to a campaign to get the word out that they are in favor of the amendment.  FAR is planning to sponsor a campaign, media blitz, etc, to inform their members as well as the public that this is a favorable bill.By the way,not sure if you know but FAR was not in favor of the "Save our Homes"amendment which caused this disparity in taxes.  I am an FAR Direcotr and will be at the meetings next week and I'm sure there will be more information available.  There was a recedt discussion by several law makers about portability of a certain amount (not sure what the amount was) but it did not receive much support from the legislature.  There has been so much hype about the amendment that will affect residential properties and not enough about the amendments that will help commercial property owners.
Aug 17, 2007 12:44 PM
Debra Spadafora
EWM - Pinecrest, FL

I also wanted to mention that the meeting EWM is having August  29th from the Governmental Affairs Director of  the Realtor  Assoc. of Greater Miami and The Beaches will clarify the amendment and what it really means to all property owners.  The media is only reporting the effect that the tax cut will have on their budgets and trying to put a scare into the public regarding the services that may be cut instead of talking about the fact that county governments have enjoyed a substantial surplus in their revenue because of property taxes. I believe they call that "sensationalism"  
Aug 17, 2007 12:54 PM
Beth Butler
Beth Butler - Big Mouth Consulting - Miami, FL
Debra - I am doubtful this will ever pass - what do you think?
Aug 19, 2007 04:15 PM
Debra Spadafora
EWM - Pinecrest, FL
Not sure what the odds of it passing are either however, wanted to let those who have an interest in commercial real estate know that there is something in the bill that will benefit them considering the focus has been on residential properties.  I'm sure as we get closer to the vote there will more hype which will cause more confusion and ultimatley defeat the amendment.
Aug 20, 2007 12:54 AM