Island Florida , Tax Break For Residents?
time for 'Save Our Homes'?
A Florida law that helps
keep property taxes in check has kept some stuck in homes. A
proposal would let you take your cap with you.
Recent years have seen Florida and
Marco Island real estate values climb like the space shuttle
launching from Cape Canaveral. In fact, many owners
could not afford to move from their current homes just because
they would be devastated by the increase in taxable value of
the new home. We all enjoy the 3% maximum increase
annually and on our taxes, yet feel that we would like to
move, and maybe realize some of that value increase in our
property. The problem is when we sell, we have to
purchase something to live in, and down here in Florida, we
will have to by something that is expensive, thus our taxable
values will be ski high! Sure, we could all move to
Costa Rica, and live like kings, with low taxes and great
property prices, but that is not reality as many of us have
families, parents and such to consider..
There is a proposal out there that is
raising some eyebrows in the state level government. Enter
into the picture Ken Pruitt, the next Senate President and one
that feels that the "Save Our Homes" property tax
cap should be a mobile fixture that can be moved from one home
to another. A year ago, many joked at the possibility,
now it is a very real possibility.
Leaders in the Legislature are
excited at the idea that Florida's
"Save Our Homes" property tax cap needs to be
portable so Floridians have one less hurdle to buying a new
home, be it empty-nesters wanting to downsize to a condominium
or a young family needing more bedrooms.
"The status quo is becoming untenable," said Sen.
Steve Geller, D-Hallandale Beach, one of the proposal's
sharpest critics last year, who now embraces it. "A lot
of people are trapped in their homes."
Just a year ago, the idea stalled in both chambers over
criticism of its long-term effect on local governments, which
are funded almost entirely by property tax revenues, and the
potential to shift more of the tax burden to business and
Further, the plan could sharply exacerbate the inequities
that Save Our Homes already has created in the property tax
base. Right now, two neighbors in identical homes can pay
radically different taxes if they bought their homes years
But the climate for changing the system has grown more
favorable in Tallahassee as lawmakers have heard complaints
from constituents and fears have risen that the real estate
market might be cooling.
Seven bills addressing the issue already are filed for the
2006 legislative session. And last week, in the first hearing,
the proposal that had been shut out last year sailed
unanimously through the Senate Community Affairs Committee
with bipartisan support. It faced sharp objections by the
Florida Association of Counties.
"Four years ago I got laughed out of committee,"
quipped Sen. Mike Haridopolos, R-Melbourne, who has filed the
bill repeatedly with Rep. Carl Domino, R-Palm Beach Gardens.
"Now everyone likes it. It's great."
Because the original Save Our Homes was done by
constitutional amendment, anything to change it would have to
be approved by the voters as well. First, 60 percent of the
members of both chambers would have to agree to put it on the
November ballot as a proposed constitutional amendment. Then,
a simple majority of voters is required to adopt it.
Here's how the Domino-Haridopolos proposal would work: A
homeowner with a house whose taxable value is $100,000, but
who sells it for $300,000 would get to take the difference
($200,000) with him or her to the new home. If the new home
cost $400,000, they would only pay taxes as if it was worth
There are some limits.
The homeowner would only enjoy the full benefit of the
transfer if the new home being purchased cost at least as much
as the sales prices of the old one. When buying a less
expensive home, the property owner would only be able to
transfer a partial, pro-rated benefit. And no homeowner could
use the law to have a new home with a lower taxable value than
the one they just sold.
Domino contends that rule means Florida's local governments
won't suffer. Plus, contends Pruitt, local governments could
use a diet: Property tax collections have doubled in the past
decade to $22.4-billion, far faster than the state's
But critics, state economists, and even Gov. Jeb Bush, see
it differently in a state where property taxes pay for
everything from schools and police to parks and senior citizen
They say the plan would slow the growth in the state's
property tax collections because it would remove a key reason
Florida's Save Our Home hasn't had more impact on property tax
collections. Every time a home is sold in Florida, it's
taxable value is reset based on current market values.
Remove that mechanism and Florida counties, cities and
schools would lose as much as $5.4-billion annually by 2012-13
and much more into the future, state economists estimated last
Domino disputes the projection because he said the
economists didn't consider that some homes' taxable values
would be readjusted when their owners left the state or died.
A new estimate is expected to be set this week.
"I think it's a great idea, but it has just a huge
out-year (future) fiscal impact," Bush said last week.
"Cutting other people's taxes is appropriate sometimes,
but you've got to be (careful)."
But Bush doesn't have any formal role in whether the
measure makes the ballot. Unlike laws passed by the
Legislature, which Bush can veto or sign, joint resolutions to
place ballot questions before the voters don't require the
One clear hurdle to the plan does remain: House Finance and
Tax Committee Chairman Fred Brummer, R-Apopka, who for two
years has kept Domino's plan from being heard in his
committee. On Friday, he said he still doesn't like it. If you
would like to contact Fred Brummer, and tell him what you
His E-mail: email@example.com
409 South Park Avenue, Apopka, FL 32703
"I'll hear it after the "All-Hell Hockey Team' is
announced," Brummer said. "And that takes at least a
year after hell freezes over."
In fact, Brummer is a key critic of the original Save Our
"It's the perfect reverse Robin Hood because it steals
from the poor and gives to the rich," he said. "It
provides the greatest value to the most expensive homes."
Indeed, as home values have escalated, so has the Save Our
Home benefit for wealthy homeowners. Last year, owners with
homes valued at more than $500,000 accounted for 49 percent of
the Save Our Homes exemption though they only made up 19
percent of Florida's owner-occupied homes.
House Speaker Allan Bense could intervene. Last week, he
made no promises, but noted, "There are folks hurting out
there, I would like to provide some help."
Even Florida's Association of Counties has changed its
tactics. After outright opposing the plan last year, this year
it's telling lawmakers it is aware there is a problem that
needs to be addressed.
But the association wants lawmakers to wait to hear
recommendations from the committee of experts that will be
formed next year as part of the state's mandated 20-year
review of tax and finance issues. The committee's suggestions
will be put before voters as amendments to the state
Constitution in 2008.
So far, there's little sympathy for the idea, particularly
in South Florida, where rising insurance prices are piling
into an already-expensive house market. Sales of existing
homes in the region were down by as much as 25 percent in
November in some counties.
"I'm thinking of my 86-year-old grandmother, and if
she wanted to move or needed to move, what we should do,"
said Sen. Alex Villalobos, R-Miami, who is expected to become
Senate president in 2008 and voted for the Domino plan
"I can't go home and tell her our plan is to wait two
State Renovation time for 'Save Our Homes'