By Greg Giordano
In November all registered voters in Florida will have the opportunity to cast their ballot on a proposed amendment to the state’s constitution which will change, in part, how property taxes are assessed. Broadly, the purpose of the amendment is to provide incentives for people to purchase new or existing homes in Florida. Additionally, the amendment will eliminate the so-called “Recapture Rule” which allows the collection of higher taxes on properties that are losing market value. The provisions of this amendment will apply to most assessments which appear on a property owner’s tax bill except for local school taxes.
In the early 1990’s the Florida Cabinet approved the “Recapture Rule” which allows tax collections to increase on properties even though the market value of the home drops. Senator Fasano sponsored the language which, if adopted, will give the Florida Legislature the ability to address the “Recapture Rule” by general law, rather than through the cumbersome constitutional amendatory process.
“Residents who have owned their homes for many years are penalized during downturns in the economy by property taxes that continue to rise, even as the value of their homes fall,” Senator Mike Fasano states. “This tax burden hurts homeowners already hit by plummeting home values, rising insurance premiums and the overall increases in the expense of owning and maintaining a house.”
Additionally, the proposed amendment will help the slumping real estate market by giving additional tax exemptions to first-time homebuyers in Florida. People who have not owned a home in Florida in the past three years meet the definition of a “first-time homebuyer.” In addition to the existing homestead exemption anyone receives when they purchase a primary residence, under this amendment they will receive an additional exemption on half of the appraised value of the property. This exemption will be phased out 20% per year over five years. The exemption only applies to the first $150,000 of the home’s value.
Finally, current law allows that non-homestead property taxes may increase 10% per year. This provision is similar to the existing Save Our Homes cap which limits homestead property taxes from increasing more than 3% per year. If this constitutional amendment is adopted it will reduce the cap to 5% for non-homestead property.
“A super majority of voters, 60%, will have to approve this amendment before it can become part of the Florida Constitution,” Senator Fasano comments. “So many people will benefit from these proposed changes. It is imperative that Floridians get out and vote in favor of this proposal. It has the potential of turning around a real estate market that is stagnant, all while helping first time homebuyers get a house to call their own.”
On Election Day Floridians will find out if these benefits will soon be heading their way.