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SPECIAL REPORT: Your neighbor's tax bill

When it pays to stay put

By CHANDRA BROADWATER
Published March 26, 2006

	[Times photo: Edmund Fountain]
	Rob Bunn has lived on Gulf Winds Circle in Hernando Beach for the past three years. Because of the Save Our Homes Act, homeowners who have lived there for many years pay fewer property taxes than newcomers like Bunn. He paid $6,700 last year. "You have to be willing to pay for it.. ... To us, it's all worth it," Bunn said.

HERNANDO BEACH - Charles Ryan loves his home.

He wakes up to Gulf Coast mornings and passes the evenings watching the sunset. Dolphins play in his back yard.

Six years ago, Ryan and his wife, Carol, moved to Hernando Beach from Spring Hill for the relaxing scenery and for future retirement. The quaint white, one-story house with brown trim on Gulf Winds Circle that they found during their home search was perfect.

The exhale of a low-maintenance, low-stress life is what the silver-haired 65-year-old from New Hampshire always wanted. He and Carol, 63, would work until they were really ready to slow down,he from his local realty business, she as a Pasco County schoolteacher.

Now that they're a little closer to that stage of their lives, Ryan finds himself trapped within the walls of the home he loves.

Why? Three words: high property taxes.

And his aren't even that bad.

The home Ryan paid $125,000 for in 2000 has risen to a market value of $295,000. He figures he could sell the 33-year-old two-bedroom, two-bath house for $450,000.

His neighbor down the street has his four-bedroom, three-bath home on the market for $1.5-million, well above the original price. Ryan can't complain. He knows he's sitting on a gold mine. But would he really benefit from a sale?

Because he moved in when he did, Ryan was able to lock in a lower tax rate thanks to Florida's Save Our Homes Act, also known as Amendment 10. It took effect in 1995 and caps the annual increase in assessed value for homesteaded properties at 3 percent.

Ryan pays taxes on an assessed value that's close to the price he paid for his house. His tax bill last year: $1,500.

If he sold his house and moved elsewhere, even into a similarly priced house, his tax bill would be substantially higher.

His neighbor selling the $1.5-million home? According to Hernando County property tax records, Mihran Kalfayan paid $2,900 in 2005 for a house with a market value of $564,000. He moved to Hernando Beach in 1994.

But what about another set of neighbors three houses down from Ryan and across the street from Kalfayan who bought their home in 2004? County records show Dianna and Ferdinand Baromir paid $5,400 in taxes last year for their two-bedroom, two-bath home, built it 1972. The market value is listed at $315,000.

Although politicians designed Save Our Homes to protect homeowners from being taxed out of their homes, it has created huge discrepancies between what neighbors living on the same street pay in property taxes.

Hernando Beach has seen one of the highest increases in county home prices in recent years. Residents pay taxes on almost 50 percent of the taxable market value of their homes, according to an analysis by the St. Petersburg Times .

Lawmakers in Tallahassee have proposed to expand the tax cap so people can take their current rates with them. This would let people buy new homes without paying what amounts to a tax penalty. But the disparities between homeowners would grow wider still.

Come back to Hernando Beach and consider the $465,000 three-bedroom, three-bath home Rob Bunn built three years ago. The tall taupe structure with white trim sits a few houses up from the Ryan home on Gulf Winds Circle. Bunn and his wife, Debbie, paid $6,700 in 2005 taxes on a taxable value of about $360,000.

The Bunns moved from another home in Hernando Beach, knowing that their taxes would rise.

"They're outrageous," Rob Bunn said, standing on his front porch while swatting mosquitoes one evening last week. But he says people make choices based on what they want, whether it's expensive or cheap.

"You have to be willing to pay for it and come with a chunk of change if you want to live here," Bunn said. "To us, it's all worth it."

Back at Ryan's home down the street, the homeowner said he doesn't think that making the cap mobile will help. The way he sees the current situation, some people are making up for what others aren't paying.

And when the people who pay lower taxes, like he does, finally do decide to move, or are forced to move, their wallets will be sacked for what they were able to save all those years while staying in the same house.

The Realtor doesn't know if cheap housing exists anymore - anywhere in Florida.

Because of the increase in property rates, affordable homes, such as those in Hernando Beach where fishermen used to live and ones in Spring Hill, which used to be occupied mostly by retirees, are hard to find.

As a result, the young and old are pushed out of the way by others ready and willing to pay top dollar, he said. And that means fewer people to buy a house like his.

Save Our Homes has also produced hesitancy among potential home buyers, he said.

"I'm going to have to tell them that their tax rates are not going to be like mine," Ryan said, sitting in an easy chair in his living room. "And they won't want to pay that."

As a Realtor, he talks to people who say the same thing almost every day. Especially seniors who are looking to downsize. They're shocked when they find out they could pay higher taxes for a smaller home.

"It's just too much of a jump for anyone," he said. "And I'm afraid it's just the beginning here. What are people who are just starting out or those on fixed incomes supposed to do? I don't know what the answer is."

--Chandra Broadwater can be reached at cbroadwater@sptimes.com or 352 848-1432.

[Last modified March 26, 2006, 00:25:14]