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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


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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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