House Set To Approve Property Tax Overhaul

April 29, 2011

Despite strong opposition from cities and counties, the House is set to approve on Friday a proposed constitutional amendment that grants business owners, landlords and investors a lower limit on how much their property tax bills can increase.

The proposed amendment (HJR 381) would allow Florida voters to decide whether to offer owners of non-homestead property, essentially anyone who owns a business, second home or rental property, a cap on their property taxes. It was amended Thursday to match the Senate version, which has a proposed cap on tax increases of 5 percent.

That is a big reduction from current law, which says that for non-homestead properties property taxes can go up no more than 10 percent a year. But counties and cities oppose the measure because it could drain their revenue stream, causing them to levy higher taxes on all property owners to make up the difference.

“If you purchased a home, a second home or business you would be realizing no benefit,” said bill sponsor Rep. Chris Dorworth, R-Lake Mary, while the person next door might pay far less in property taxes.

The bill also gives a special tax discount to first-time homebuyers. The measure was amended Thursday to offer a first-time homebuyer tax discount of 50 percent of the home’s value, not to exceed 50 percent of the median home price in that county. This was a less generous discount than originally proposed under the bill.

“The main goal is really to bring more fairness to Florida’s system,” said John Sebree, a lobbyist for the Florida Association of Realtors. Under the “Save Our Homes” law, owner-occupied homes have their property tax increases capped at 3 percent. But owners of vacation homes or rental property have 10 percent caps.

Realtors argue that renters also suffer from the cap difference because landlords may see their property taxes rise and pass it on in the form of higher rent. Of all the residential properties in Florida, about a third are occupied by renters or second-home owners, according to the Realtors.

A companion implementing bill (HB 1163) would put this issue on the presidential primary ballot in 2012.

A similar measure was approved by the Legislature in 2009, but was struck down by the courts for its confusing ballot language. If approved by Florida voters, it could impact people who bought homes this year.

“Since negotiations have been going on, we have been firm on 7 percent,” said League of Cities lobbyist Amber Hughes. “We think that is an appropriate cap on non-homestead. It would give the stability the proponents of the bill are after and still mitigate some of the concerns we have.”

A Senate staff analysis of the proposal says cities and counties could see a $452 million hit on tax revenue just in the 2013-2014 fiscal year alone. The Senate version (SJR 658) never passed its final two committee stops.

That may not spell doom for the bill’s outcome, because Senate President Mike Haridopolos, R-Merritt Island, said Thursday that bills that did not make it out of the Budget committee could be heard on the floor.

By Lilly Rockwell
The News Service of Florida

Comments

2 Responses to “House Set To Approve Property Tax Overhaul”

  1. joe on April 30th, 2011 10:50 pm

    there will always be the “HAVES” and “HAVE NOT’S”
    people with non homestead exempt property typically falli nto the “HAVE” catagory. reducing their property tax will have great economical effects. this will disrupt the financial structure of funding for the entire state. reducing these taxes only puts more money in the pockets of those who already have it. I am not for
    re-distrubution of wealth, do not confuse this. what I am saying is
    they figured out how to make the money in the first place, and aquire non homestead exempt property, I am sure they can continue to do it under the current system without a tax break. their taxes support many, many, many things.
    Why change something that is already working better than most systems?
    A solution to a problem that is worse than the original problem is no real solution!

  2. eab on April 29th, 2011 10:16 pm

    Raising property taxes on anyone more than 5% a year seems excessive. And I would think an increase of 10% would make anyone howl.

    Although with so many people having trouble paying for a first home, why do we need tax breaks on second homes? I’m not really up on the ins and outs of Florida tax law so maybe someone could clarify this.

    This law could affect our communities in a number of ways.The subject should interest us all, so maybe we could keep the “liberals stink” and “conservatives are jerks” to a minimum while we examine it. I’ll promise if y’all will.

Written by William Reynolds · Filed Under News