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Columns
Double the homestead exemption? Gee, thanks a lot
The proposal to double the homestead exemption from $25,000 to $50,000 on Florida homes is a joke.
By James Thorner, Times Staff Writer
Published November 12, 2007
The proposal to double the homestead exemption from $25,000 to $50,000 on Florida homes is a joke. There, I said it. But it's hard to laugh at this particular joke. In all the debates about property taxes, no one seems to mention that the $25,000 homestead exemption, effective since 1982, has been The Incredible Shrinking Tax Break for 25 years. When the exemption was increased from $10,000 to $25,000 between 1979 and 1982, the median home price in the Tampa Bay area was about $50,000. In other words, the exemption cut the taxable value of your house in half. March forward 13 years. In January 1995, when the complementary Save Our Home tax cap took effect, Tampa Bay area homes sold for a median price of $71,000. The homestead exemption exempted about 35 percent of a home's value. Observe our plight today: Based on September's local home sales price of $200,700, the value of the exemption is only 12 percent of a typical home's value. What seemed like a governmental gift in 1980 is the Great Home Heist in 2007. Home values have risen through the roof, but the state hasn't indexed the exemption for inflation. Instead, the Legislature passed Save Our Homes, approved by voters in 1992. SOH caps the increase in taxable value of a primary residence at 3 percent a year. When you move, you lose the accrued savings and are taxed at your new home's real value. Florida Tax Watch flagged the unfairness of SOH back 1992. People mistakenly think SOH is a tax cut. It's not. It's a tax shift, a shift to first-time home buyers, businesses, vacation homes and anyone who wants to change his or her address. To its credit, the Legislature tried to rig a fairer tax structure this year. The homestead exemption would have expanded to 75 percent of a home's value up to $200,000. The state would have taxed a $200,000 house as if it had been worth $50,000. Voters feared the change. A judge objected. And the Legislature hatched this turkey of a compromise to double homestead to $50,000. On my house, it's going to cut $200 off a tax bill of $6,200. The sound you hear is laughing. And it's not the joyous variety.
[Last modified November 9, 2007, 23:09:42]
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Comments on this article
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by Chris
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11/13/07 12:56 PM
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This break lowered taxes for every homesteaded house which doesn't make sense. I pay $5k, my neighbor pays $1500. Now I'll pay $4800 and my neighbor pays $1300. How fair is that? So what if I bought more recently, I don't use more services.
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by Kay
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11/13/07 10:32 AM
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Don, your 2nd home should have higher taxes than your homestead in NY. It is a luxury. Also, you only $pend here for a small part of the year (our fire dept will respond even if you are not in FL). FL doesn't want to be known as "cheap".
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by James
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11/13/07 08:13 AM
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nick, you don't take into account the local and county budgets in your numbers.
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by Joe
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11/13/07 08:11 AM
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ms, have you lived anywhere else besides florida? my taxes here have gone down the last three years and my insurance (this is the real problem) dropped this year too. people here have no clue about how bad it is elsewhere.
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by Gary
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11/13/07 12:34 AM
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Should keep the SOH 3%cap,take each county &combine all city&county governments& eliminate all assistant&deputy positions, this would generally save 30% in overhead costs. Roll back&freeze millage rate to yr 2000. Allcapital projects approve byvoters
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by Gary
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11/13/07 12:19 AM
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Homestead exemptions just pile more taxes on folks who own more expensive homes. Does not lower county & city buget growth & large capital projects. Should rollback milage rates toyear 2000 rates&requireall capital projects approved public referendum
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by Bob
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11/12/07 11:41 PM
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If your Median price home is $71,000, they will not quaify for $50,000 homestead. Only houses that assesed at over $75,00 get a tax break. The poorest Floridian get nothing.
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by Corey
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11/12/07 11:31 PM
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I don't understand the math. If a $50K exemption takes just $200 off your taxes then a tax bill of $6200 indicates you live in a home valued at $1.55 Million. And you want me to feel bad for you? Get real!!!
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by Tom
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11/12/07 08:51 PM
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The Homestead tax is the only thing keeping us from buying a Florida home for our retirement.
We will continue to vacation in Nevada.
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by bird
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11/12/07 07:53 PM
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Pay attention to what Kathy from NJ wrote! Taxes in many state are much worse than Florida. The new amendment is going to help even more. If it is not fully what you want, at least it is a step in the right direction,
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by Marty S.
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11/12/07 07:29 PM
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So would you prefer nothing? I say take this increase, pray for a depression, watch the housing market implode, and laugh all the way to the bank.
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by Steve
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11/12/07 04:40 PM
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Even with SOH my taxes go up 3% every year because of recapture rule put into SOH law after people voted by kawton chiles because he said thats what we think the people meant. And nobody made anybody buy @ inflated prices of greedy developers,etc.
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by Steve
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11/12/07 04:34 PM
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If they abolished SOH today, do you think they would lower new home buyers taxes and raise SOH res? Hell no! They would only raise the tax on homes formerly protected by SOH.Homestead property should not even be taxed.all other prop tax sb lowered.
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by John
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11/12/07 04:20 PM
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I'm 31 saved and just bought my house. I love SOH as it allows me to budget for taxes over the next 20 or so years so I know I can afford them. I pay more in taxes than my neighbor, but I also paid more at the closing table then he did - so what?
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by Don
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11/12/07 03:51 PM
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Believe it or not.As a nonhomesteader I Pay more in property tax in FL then I do in NY.We all know NY leads the nation in taxes.Does not say much for cheap living in FL does it.
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by Susan
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11/12/07 03:41 PM
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I rent the home I lived in for 20 yrs to a poor familiy that only pays me 950 per mo, where do you think they will go and how will they pay if I have to sell that house because I can't affort the taxes and Ins? This will end up costg the State more!
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by JK
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11/12/07 03:09 PM
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This does nothing for first time buyers and very little for those who bought recently. Fewer new homeowners equals more homes sitting for sale. The avg young person won't buy here unless they have roots, and many of those are leaving.
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by ms
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11/12/07 02:05 PM
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Hey Joe, you don't want to hear us complain, then go move in with your Mom. Taxes and wages here suck and we need help or we will only have more people living on the street. We all need to make more noise so goverment will hear us. Wake up Charlie.
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by incredulous
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11/12/07 01:58 PM
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if you want relief on second homes or investment or winter homes you are missing the point of the intent of the law and being selfish (human nature). The system by definition is not fair and should be scrapped the bubble was not anticipated...
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by harold
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11/12/07 12:50 PM
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everyone asked for more schools,police and firemen.well you got it with increased benefits and salary.no way the state will rescind these additions.
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by DG
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11/12/07 12:25 PM
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I am sure this is going to loose at the polls. Floridians are too smart to accept this. It does nothing but propagate the "tax shift" to new and future homeowners...There is no true tax cut...
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by Nick
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11/12/07 11:47 AM
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My Sources:
http://peoplesbudget.state.fl.us/reports/governors_bill_2007.pdf
http://dor.myflorida.com/dor/property/databook06_1.html#R32T
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by Nick
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11/12/07 11:46 AM
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Here's some staggering math. The proposed 2007 FL state budget is $1.48 billion. The net value of all property in FL is $2.306 trillion. If everyone paid $0.64 per $1000 of their home's value, the state budget would be paid for. That's a fair plan.
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by gerry
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11/12/07 11:15 AM
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Just more smoke and mirrors from the politicians who always seem to get what THEY want/need...!
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by Deb
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11/12/07 10:49 AM
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Taxes are high everywhere. That's just the nature of the beast. However, if the burden was spread FAIRLY AND EQUITABLY TO ALL, it might be more tolerable. Until that changes, you can forget it. Any exemption should be in proportion to values.
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by vdk
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11/12/07 10:48 AM
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I think the state government intentionally made this proposal ridiculous so it would fail. This would mean that nothing gets done for another year or longer and they keep collecting while giving the appearance that they're trying to do something.
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by Nadine
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11/12/07 10:13 AM
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I'm always game for more tax breaks, no matter how ridiculous the author thinks they may be.
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by Gloucesterman
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11/12/07 09:33 AM
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Damn red-necks! How can they get away with this .It's time to to feeding the pig!
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by Joe
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11/12/07 09:31 AM
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it's better than nothing. it's obvious the legislature can't find the answer to this situation. my taxes are still cheaper here than my mother's in PA. my house is 3 times the size and 30 years newer. taxes here are cheap. stop complaining.
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by Patricia
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11/12/07 09:16 AM
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This article says it all! Most people do not realize the "savings" is so minimal under this proposal. Those of us who made moves during the "seller's" market need the help the most! But we are not going to benefit from the changes
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by Bland
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11/12/07 09:11 AM
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I agree with Mr. Thorner that the proposed amendment does not do enough to lower taxes. The concern I have is the focus on how we tax and not about reducing the government spending to reflect actual income growth. This is the real problem not SOH.
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by Dave
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11/12/07 08:47 AM
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Thank you for doing the math and this Govenor thinks this is the answer? He is hawking a NOTHING bill that only keeps people not paying their FAIR share. Why protect people that do not contribute for the services they consume?? It's NOT FREE!!!
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by jack
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11/12/07 08:45 AM
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"...the value of the exemption is only 12 percent of a typical home's value." Seems to me the new exemption is closer to 25 percent of a "typical home's value".
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by Josie
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11/12/07 08:41 AM
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Mr. Thorner is totally correct, BUT, he could also have included the snowbirds, businesses, and all non homesteaders in this plight--they are worse off than he is. Watch rents go up JUST to cover taxes..not to mention insurance costs. Why do this?
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by Carl
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11/12/07 07:57 AM
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Thanks for printing the Simple Truth. We are all being fleeced by bureaucrats who refuse to cut their spending habits. My home is in disrepair while we are forced to build them marble and mahogany offices and fund their fat pensions & paid vacations.
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