Politics

Which exemption for low-income seniors? Hmm ...

It's not a one-size-fits-all issue, property appraisers say.

By AARON SHAROCKMAN, Times Staff Writer
Published September 19, 2007

The proposed property tax amendment has a big carrot for Florida's poorest seniors: a homestead exemption quadruple what many have now.

For some, it would mean never again having to pay property taxes.

For others though, the decision to take the bigger exemption would be a financial misstep.

Who falls into which category? Property appraisers are reluctant to generalize. And, to make things more difficult, most low-income seniors will not be able to figure out the right answer for themselves.

The "super exemption calculators" on property appraiser Web sites - which can guide the decisions of everyone else - do not work for the low-income elderly. Appraisers are aware of the flaw but see no easy way to fix it.

The senior tax break is so confusing that at least one property appraiser, Mike Wells in Pasco County, is at odds with the Florida Department of Revenue on its interpretation.

And the head of the Florida Association of Property Appraisers said seniors should call their local appraiser for a one-on-one consultation.

Appraisers insist they can make the time for those affected- tens of thousands of older, low-income homeowners in the Tampa Bay area and about 500,000 in Florida.

But the irony is not lost on Tim Wilmath, the Hillsborough County property appraiser's director of valuation. "Isn't it wonderful that the most difficult explanation is needed for people who needed the simplest one?"

People like 64-year-old Paul Newbury of Hernando County, who studied the issue and concluded, "I can't figure it out."

Your savings now

Like other homeowners who qualify for homestead exemption, low-income seniors currently are protected by the Save Our Homes amendment, which limits taxable property values from rising more than 3 percent annually.

Over time, the cap creates a difference between the taxable and market values of a home. All homeowners also receive a standard $25,000 homestead exemption.

The super homestead plan

The super homestead eliminates the 3 percent Save Our Homes cap so a property's market and taxable values before exemptions would be the same.

But the new plan comes with larger exemptions.

The super homestead exempts 75 percent of the value of a home up to $200,000 and 15 percent of the value between $200,000 and $500,000.

All homeowners would receive at least a $50,000 exemption.

But qualifying low-income seniors would get a minimum $100,000 exemption.

Voters will be asked Jan. 29 to approve the new property tax structure. If more than 60 percent support the plan, everyone who qualifies for homestead exemption will have to choose between Save Our Homes and super homestead.

Which is better for seniors?

That's a tough question, agree three property appraisers who spoke to the Times. Wilmath, Pam Dubov, chief deputy property appraiser for Pinellas County, and Gary Nikolits, the president of the Florida Association of Property Appraisers and the property appraiser in Palm Beach County, all said low-income seniors should call their local property appraiser for one-on-one consultations.

"It's almost got to be a case-by-case kind of thing," Dubov said.

For Newbury, the Hernando County senior, the super homestead happens to be the better option. Since he moved into his home just last year, Newbury has not benefited from the Save Our Homes cap. He should take the larger exemption.

Here are six points other seniors of modest means should consider.

1. Would you qualify?

In order to meet the state eligibility requirements, you have to be 65 by Jan. 1, 2008. If you turn 65 later in the year, you cannot apply until 2009. (Newbury, for example, believes he would qualify in 2009, after his 65th birthday.)

You also must have had a household income of less than $24,214 in 2007. The income ceiling increases each year based on inflation, and in most cases does not include Social Security benefits.

2. Your current exemptions

This can get complicated. Though you may notice only one number on your property tax bill - the total amount you owe - your property taxes are sent off to several places. They pay for schools, city government, even mosquito control.

The state currently provides a $25,000 homestead exemption on a homeowner's permanent residence. But the state also allows those individual governments to create additional exemptions for low-income seniors. They can choose any dollar amount between $0 and $50,000.

In the Tampa Bay area, Dunedin, Indian Rocks Beach, Oldsmar and Safety Harbor offer the maximum $50,000 senior exemption. Some other governments offer a lower amount - Hillsborough County recently increased its senior exemption to $40,000. And some governments don't give seniors any exemption at all.

Mike Wells, the Pasco appraiser, assumed that since the existing senior exemptions are optional, the $100,000 exemption in the proposed amendment would be a local option too. The state Department of Revenue, however, says the senior exemption would be available to all qualifying seniors.

"We have received no communication whatsoever from anybody in Tallahassee," said an obviously upset Wells this week. "I'll do whatever the Legislature wants. But they have to say what they want first." He said he plans to ask the Department of Revenue for clarification.

The property appraiser in Pinellas says the extra exemption has saved low-income seniors an average of $83.81 annually, from a high of $187 a year for homeowners in Oldsmar to a low of $20 in North Redington Beach.

There are two big caveats:

First, unlike the $25,000 homestead exemption, the senior exemption only applies to a portion of your property taxes. If the city of Dunedin agrees to an extra $50,000 senior exemption, for example, the Pinellas School District is not forced to as well.

And second, seniors who enjoy an extra exemption now would get to keep it if they choose the super exemption, according to the Florida Department of Revenue. So low-income seniors living in Dunedin would have a minimum $150,000 exemption on city taxes, and $100,000 exemption on the rest of their property tax bill.

3. Save Our Homes

This may be the most important thing you need to know: If your home has a market value of $133,000 or more, Save Our Homes will often be the better deal.

If your home is worth that much, you no longer receive an added benefit for being a low-income senior. Everyone in that case earns at least a $100,000 exemption.

4. Your plans

Like most analyses projecting the long-term impacts of both tax plans, the super homestead saves money in the short term, but eventually costs taxpayers more than Save Our Homes in time.

The $100,000 exemption, however, insulates how quickly the change occurs and will take 10-15 years in many cases.

5. The tax calculator

Your local appraiser's super exemption calculator does not work for low-income seniors. The calculator, which many property appraisers have made available on their Web sites, does not factor in the senior exemptions.

6. The market value of your home

People who live in homes with low market values would see significant savings from the super homestead.

In many cases, low-income senior homeowners would not pay taxes at all if their market value is close to or below $100,000.

Conversely, people who have high market values would receive less benefit from the super homestead.

You can find an estimated value of your home from your county's property appraiser. Remember: Your market value is different from your taxable value.

But if you have any doubt about how to choose, contact your property appraiser.

Aaron Sharockman can be reached at asharockman@sptimes.com or (727) 892-2273.

Fast Facts:

Where to call

Local property appraisers say they can walk you through your options.

Hernando County: (352) 754-4190

Hillsborough County: (813) 272-6100

Pasco County: (727) 847-8151

Pinellas County: (727) 464-3207

For more information on the super exemption amendment, go to the Times property tax page at www.tampabay.com/taxes

Super homestead: Is it for you?

Do you qualify for the $100,000 exemption?

Must be 65, earn less than $24,214 a year.

What's the market value of your home?

The lower the better. Above $133,000 means Save Our Homes might be better.

What exemptions does Save Our Homes provide?

You might already be getting a good tax deal.

How long do you plan to stay put?

For the super homestead, shorter is better.

[Last modified September 19, 2007, 01:20:58]