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By the Times staff
Published January 20, 2008
Nearly 18 months after widespread taxpayer protests, Florida voters will decide Jan. 29 on dramatic changes to the state's property tax system.
But Amendment 1 isn't the comprehensive reform first sought by lawmakers. Rather, it's a patchwork of four provisions shaped by political compromise.
The biggest winners would be longtime homeowners, who already benefit the most under Florida's property tax system.
Other taxpayers -- including businesses and snowbirds -- would also see future protection from drastic tax increases, but not much relief now.
Can you explain Amendment 1 simply?
Not really. It contains four provisions and voters will have one choice: approve them all or not.
But let's take them one at a time, starting with the increase in the homestead exemption.
I've heard that called "doubling the $25,000 homestead." Is that right?
Not exactly. Currently, homestead properties are exempt from taxes on the first $25,000 of property. Amendment 1 would exempt another $25,000 of property from local and municipal taxes. However, school taxes would not be exempted, so it's more like increasing the exemption to $40,000.
To fully enjoy the new exemption, the property must be worth at least $75,000. Homes worth less than $50,000 would receive no new benefit and those between $50,000 and $75,000 would have a prorated benefit. The state estimates the full benefit is about $240 per house per year.
If Amendment 1 passes, would I be able to take my Save Our Homes benefit to a new house?
Yes, with some limits. The amendment's second provision, called "portability," would allow owners to transfer benefits from Save Our Homes.
What's Save Our Homes?
Save Our Homes, approved by voters in 1992, caps annual tax assessment increases on homesteaded properties at 3 percent, regardless of the home's increase in market value. The wildly popular program has shielded the majority of Florida's homeowners from dramatically higher taxes during the recent real estate run-up. But it also led some homeowners to feel trapped in their homes because they would face much higher taxes if they move and lose their Save Our Homes benefit.
So portability would fix that, right?
Yes, for homeowners who moved in 2007 or later. But it would also worsen indefinitely the inequities Save Our Home has created between identical homes in neighborhoods. People who are already paying far less taxes could move to a more expensive home and possibly never pay as much taxes as a neighbor in a more modest property.
How do I determine how much Save Our Homes benefit I could potentially transfer?
You need a copy of your property tax record. They're available online through your county property appraiser office by doing a "records search." Links to those sites can be found at www.tampabay.com/taxes.
Find two values on your record: The "just market value" and "assessed value." The first is the property appraiser's conservative estimate of what your home would sell for after real estate fees and taxes. The second is the value on which you pay taxes.
Subtract the assessed value from your just market value. The result is your tax equity. Subtract the tax equity from the just market value of the new home to obtain your new assessed value.
Can you give me an example?
Let's say your current home has a just market value of $400,000 and an assessed value of $250,000. You have $150,000 in tax equity.
As long as you buy a new home with a just market value of $400,000 or greater, you would just subtract the $150,000 to determine the assessed value on your new home. On a $500,000 home, for example, you're assessed value would be $350,000.
One other detail: There's a $500,000 cap on how much accrued Save Our Homes benefits you can transfer.
What if I want to transfer my homestead to a less expensive home? Can I take all the benefit with me?
No. But it would be prorated, which could still be a substantial break under portability.
An example: You sell a home with a just market value of $400,000 and tax equity of $150,000. You move to a home with a just market value of $300,000 -- 75 percent of the original home. Your tax equity would be prorated at 75 percent to $112,500. Your new assessed value is: $187,500.
What if I already own another home and I just want to transfer the homestead? Is that allowed?
Yes, but only if the new homestead is established in 2008 or later.
What helps non-homesteaded properties under Amendment 1?
One provision could cut the tax bill for some businesses by creating a new $25,000 property exemption for some business equipment and mobile home property. Another provision caps annual assessment increases at 10 percent for nonhomesteaded property. However, the cap would not apply to school taxes, which would continue to grow with the market.
How is education spending affected?
State economists have estimated schools would lose $1.55-billion in tax revenue under the first five years of Amendment 1. Lawmakers have pledged to make up such lost revenue, but they have yet to say how.
Does this plan do away with Save Our Homes, or the original $25,000 homestead exemption?
No. Regardless of what happens in the election, homesteaded homeowners will still be protected under the 1992 Save Our Homes. And they will still pay no taxes on the first $25,000 in value of their homes.
[Last modified January 20, 2008, 01:39:51]