I would appreciate hearing your comments regarding the new Florida property tax provisions presented recently by the Florida legislature.  Among the problems with the reform are people are locked into their homes; there are huge problems with highest and best use of a property; and taxes could have been rolled back for significant savings.  We deserve to have high expectations from our elected officials because total tax levies have increased by 99% between fiscal year 2000 and 2007, according to the Florida Association of Realtors. 

"Save Our Homes", which passed in 1992 created huge inequities among Florida taxpayers by allowing one house next to another paying  very different property taxes.  Because of Save Our Homes, local taxing authorities have increased the burden on non-homstead properties to compensate for the homstead savings.  According to FAR's president Nancy Riley, "the three problems with real estate in Florida are property taxes, property insurance and negative publicity."  Recently, the Florida Legislature passed three bills. Statutory rollbacks which are immediate and already signed by the Govenor; a constitutional amendment that creates a Super Homstead Exemption and a call for a special election. 

Save Our Homes is an assessment on cap on Homstead properties only.  It reduces the taxable value but it does not limit tax rates.  Local governments have had to keep millage rates artificially high to compensate for the taxable value that is shielded by SOH.  This particularly hurts the commercial and non-homstead properties. 

Instead of an assessment cap (such as SOH) there is an overall revenue cap proposed limiting what governments can collect from property taxes.  This will protect everyone, including commercial and rental housing from big and unpredictable property tax increases from year to year. The revenue cap requires a local government to collect the same amount of revenue it did in the previous year (adjusted for new construction and statewide personal income growth).  This would be the first time ever guaranteed property tax protection for commercial  and non-homestead properties in Florida's history. The statutory rollback  equals $15.6 billion in tax relief over five years, according to FAR.  Let me know your thoughts.

Bill

 

$624,000.00 800 Ben Franklin Dr Unit 501 Sarasota, FL 34236 Beds: 2.0 Rooms: 5 Baths: 2.00 Sq. Ft.: 1150.00 Garage: 0 Built: 0   Comfortable fifth floor turn-key furnished open plan unit with partial Gulf of Mexico views. This is a new listing that I thought you might be interested in. Visit this listing online to see more photos of the property, Google Earth satellite images, and much more.   If you have any questions about this property or require more information, please feel free to call. William Geller Suncoast International Realty 941-374-4530 www.sarasotaandkeys.com     Visit this listing at Here

Here are a few of the details regarding the upcoming Florida property tax cap provisions, provided by the Florida Associaiton of Realtors.  I will be giving additional information details in subsequent blogs and I look forward to your comments.

For the upcoming 2007-08 fiscal year that begins October 1, all local governments (except school boards) will have to reduce total property tax revenues by a specified percentage (0-9%) based on their 5-year history of levies.  Independent special taxing districts that levy ad valorem taxes are all subject to a 3 percent cut.

For the coming fiscal year, local governments may override the 3, 5, 7, or 9% cut and go up to the 2006 “rolled-back rate” by a 2/3 vote of the governing body.  In order to exceed the 2006 rolled-back rate and maintain the same actual rate that was levied in 2006-07, the vote must be unanimous.  In order to go any higher than the actual 2006 millage rate, there must be voter approval.

EXAMPLE:

• Fantasy County had a 2006 “rolled-back” rate of 5.5 mills.
• Fantasy County levied a millage rate of 6 mills in 2006.
• For 2007, Fantasy County must use the 5.5 millage rate, reduced by the X%.
• With 2/3 vote, Fantasy County Commission can drop the X% cut and levy 5.5 mills.
• With unanimous vote, Fantasy County Commission can levy 6 mills.
• To go any higher than 6 mills, Fantasy County must get voter approval.

Beginning fiscal year 2008-09 and every year thereafter, the bill requires all ad valorem taxing authorities, except school boards, to set millage rates in accordance with the rolled-back rate, plus the annual growth of Florida personal income (typically 4% a year).  Local governments may break this cap in several different ways:

For exceeding the cap in 2008-09 (this would be after the new super homestead exemption plan potentially kicks in as well)

• In order to exceed the required rate cap to recover up to 2/3 of the revenue lost due to new super-homestead exemption and tangible personal property exemption, the governing body must approve by at least 2/3.  This was likely made as a concession to smaller counties who will have much of their homestead property exempt from taxes either through the larger minimum homestead exemption and low overall values.

• In order to adopt an even higher rate, it must be unanimous, unless the board exceeds 9 members in which case a ¾ vote is required.

In 2009 and beyond, local governments will be allowed slightly more room to bust the revenue cap.  In order to adopt a tax rate that levies up to 10% more revenue than is allowed under the rolled-back rate plus personal income, there must be a 2/3 vote of the body.  For more than 10% increase in revenue, there must be a unanimous vote or voter approval by referendum, unless the board exceeds 9 members in which case a ¾ vote is required.

The penalties for not complying with the above votes will mean that the local government will not share in the ½ cent sales tax revenue for the fiscal year, which is significant.  For example, if the Palm Beach County Commission were to ignore the mandates of HB 1B, their budget would suffer by over $74 million for the next fiscal year.  This is also bondable money that would put their ability to raise new money into question.