Is this all?
By Henry B. Nathan
June 16, 2007
Property tax relief by Florida Legislature falls short.
What did they vote?
1) Roll back property taxes to their 2006 level, and then cut an additional
0,3,5,7, or 9 % depending on how the specific cities raised their taxes the
past 5 years - Local governments can override these rollbacks by two-third
votes or a referendum.
2) A constitutional amendment will be submitted to voters on January 29th,
2008 to modify the homestead exemption. If approved, this exemption would be
raised to 75% of the first $200,000 of home value and 15% of the next
$300,000. It will be a minimum of $ 50,000 or $ 100,000 for low income
3) Beneficiaries of Save our Homes rule, have a one-time option to accept
the new homestead exemption or keep their present benefits and limit their
homestead exemption to their $ 25,000 level.
4) In the future, taxes cannot increase more than an indicator of personal
income and allowances for new construction. How will that be calculated, is
something that we ignore.
Legislators are saying that the
average homesteaded owner will get a $ 174 drop in his taxes for 2007 and a
$ 1,132 in 2008 if the new homestead constitutional amendment passes.
The average non-homesteaded owner, will get an average $ 245 a year drop by
The average commercial property tax bill will be reduced by $ 1,240 in 2008.
Most Realtors are not impressed at
all. This is not going to have any significant effect on the sagging real
estate market. The issue will have to be addressed again down the road, said
Richard Barkett, chief executive of the Realtor Association of Greater Fort
What issues were not addressed.
- Snowbirds, investors, commercial property owners, will hardly notice any
change in their tax bills. They are an important factor in Florida Real
Estate, and they a good part of its downturn.
But they have been mostly ignored.
The owners of vacation homes, who have seen their taxes and insurance bills
triple in a short time, are the big losers.
- The rollbacks, even if they reach their maximum of 9% will not solve the
problems of property owners who have seen their assessments triple or
quadruple during the last few years.
These reductions, compared to the tripling of tax bills during the last 5
years will hardly make a dent in the bills.
- The issue of the "portability" of the save-our-homes tax savings has not
been addressed. A big disappointment for thousands who are trapped in their
present homes, unable to purchase smaller or larger homes because their
taxes would triple or even quadruple. Many potential buyers are very
- The so-called relief of insurance premiums was just a hot balloon. They
are still a huge factor in maintenance expenses of residences and commercial
- If passed, the homestead exemption raise will be the only significant gain
for low-income and first-time home buyers.
A typical entry-level $200,000 home might pay a yearly average of $900 in
property tax instead of the present $ 3,150: a saving of $2,250 or about
$190 per month. That's good news for the affordable housing segment.
- A $ 500,000 homesteaded home would
be taxed an average of $ 5,490 instead of $8,550 - a saving of $ 3,060 per
year or about $ 250 per month. To pay the mortgage, insurance and
maintenance of a $500,000 home, a combined household income of more than $
150,000 per year is necessary, as per FNMA guidelines. That is at least $
12,500 gross income per month.
A $ 250 break is a welcome relief, but will not be the deal maker.
- In essence, the real issue of local governments skimming their
constituents during the real estate boom has largely been ignored. Rolling
back a maximum 9% will not recoup the 300% tax increases that have beaten up
our home buyers and non-homestead owners.
Real estate is a very large part of Florida's economy. It could not remain
ignored. Something has been done, it is true. I would say that it's mostly a
kind gesture to voters, not a solution.
- This is not going to be the shot in the arm that our real estate market
was expecting. However, it will provide a minimal relief, and,hopefully,
just a first step in the good direction.
- The proliferation of cities and municipalities in South Florida is an
issue that must be addressed. Hundreds of commissioners, city managers, city
compliance officers, city water managements, unnecessary bureaucracies,
police departments, fire departments, almost encroaching on each other, are
weighing on the taxpayer. This is not the most sensible approach to
government economy. It is not bordering the ridiculous: it is laughable.
Trying to control this insanity has caused the panic of these local
governments and their heavy lobbying on state legislature to prevent major
changes. Will they be held accountable?
Judging by the pitiful low percentage of voters on city elections, it won't
happen any time soon.
Henry B. Nathan , June 16, 2007
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